Repercussions of KPNQwest's Bankruptcy?

Atryn asks: "We are seeing more and more stories on KPNQwest's bankruptcy in Europe. Being on the other side of the pond, can anyone explain the ramifications of this large fiber backbone being shut down?" Slashdot originally covered this story back when the bankruptcy was announced. Now, a A 3-week stay of execution has been granted to the network. It will remain on until sometime in July, while the parent company tries to sell off its assets. As to the repercussions of the bankruptcy, ZDNet UK has some thoughts on the matter. Do you agree with them? Would you mind offering a few of your own? Update: 06/14 10am EDT by C :When this article was originally posted, 2 days ago, KPNQwest did indeed have an estimated three-week lifespan. Of course, that estimate has been cut down severely by recent events.

Janet

[brejc8]

As far as I know UK academic network (JANET) was solely connected by KPNQwest so they are looking for new providers [ja.net].

WorldCom has provided a new transit system [ukerna.ac.uk] but I'm not sure if its fully working and if the switch is fully over. We shall see at 7pm.

Re:Janet

[AndrewRUK]

Janet's connections are not, and were not, solely KPNQwest. There's LINX [linx.net], GÉANT [dante.net], and Teleglobe as well.

DAMN Customers!!!!

[tenman]

I heard (read) somewhere that this was all caused by customers not paying the bills. It's my understanding that it wasn't corperate greed or loose spending that delt the blow, but the fact that customers just wouldn't pay. Is this really the case?

Also, Who would want these customers now? They have a proven track record of not paying!

Someone please enlighten me on the matter.

Re:DAMN Customers!!!!

[brejc8]

When they say customers they mean companies.

Companys tend to wait until the last minute before paying else they loose bank intrest.

Re:DAMN Customers!!!!

[tenman]

I'm sorry to expose my ignorance about this but if is standard practive for them to delay payment until the 17th on a bill that is due on the 16th, or they delay until they get a notice saying "you service will be cut off on...", and then pay only what it takes to stay in the game?

Re:DAMN Customers!!!!

[mckwant]

Usually, there's some sort of payment schedule stated in the contract:

i.e. "due the 15th, 10% penalty applies after the 20th" means that the payment will be made on the 19th. Obviously, the payer wants to keep his cash in his pocket until the last possible moment. The biller, of course, wants his cash immediately. So, occasionally, there'll be incentives for prepayment. i.e. 10% off if paid before the 10th.

or something. Obviously, the smart companies will look at all the potential payment schedules, and make the best decision for their organization.

Mileage varies widely, of course.

Re:DAMN Customers!!!!

[Anonymous Coward]

Apply grain of salt and read the frontpage discussion answer here [slashdot.org]

Re:DAMN Customers!!!!

[mnordstr]

I'm a KPNQwest customer and I've always paid on time.
I think the problem is/was that KPNQwest built a huge network, something truly amazing. But that costs a lot and they had tons of extra bandwidth. It's really quite simple economics, the supply was there, the demand however was not as big as expected.

Prices and margins are going up, up, up!

[anticypher]

Had a nice long chat this evening with the head of engineering of a KPNQuest competitor. His take: Finally, maybe we can make some money.

There is a glut of dark fibre in Europe (as in the US), and that is keeping prices too low to make any money. The fibre itself isn't very expensive, its the cisco and juniper boxes on the ends of the fibres and the overpriced CCIE's (that's me) that drive up everyone's costs.

This guy was buying lots of rounds of drinks, because over the last week he's had customers coming to him for replacement bandwidth, and he was able to quadruple the price and they were still happy. A 400% increase just put the prices back where they were a few years ago, barely enough to keep running. Even with all the cost cutting, far below where they can maintain any SLA's, they still couldn't make any profit. Now maybe they can stay in business another year.

There was an entire side rant about how the monopoly telcos in each country have used profits from other divisions (mobile phone traffic, leased lines, government subsidies, illegal tax breaks *cough*fraudtelecon*cough*) to keep the prices so low that KPNQuest and others can't stay in the market. Soon, we'll be back to a single monopoly in each country (or, with mergers, just a few for all of Europe), and then we'll look back on the good ol' days when bandwidth was so cheap there was something called the internet that didn't cost $2000/month for a 64k leased line. The commission claims to have an investigation going, but they are so fucking corrupt nothing will come of it except a whitewash and praise for the criminal telcos. In Brussels, ranting and raving about the commission is a required activity on a friday evening in any bar.

On the bad side, there are now a bunch of really good networking engineers on the market, and the market really sucks right now. As one recruiter told me, he's got CCIE's jumping on CCNP salaries, and 500+ CCNP's who can't get a job. Any CV with the mention of CCNA (or MCSE) goes straight into the bin.

the AC
Yes, I have been drinking, why do you ask? Pissed has two meanings in this post