Sparkplug Redux - Page 2

By Gerry Blackwell

July 18, 2006

The integration process should go reasonably smoothly. The fact that the skills and expertise of the three companies are so complementary means there will be no need to rationalize the work force. As Malloy says, "We're trying to grow the company." In some cases, one of the partners may have been outsourcing services (backhaul, for example) but will now be able to source them internally.

The three companies' target markets and service offerings were also broadly similar: point-to-point, point-to-multipoint, and backhaul services for business and government.

Prairie iNet started as a residential service provider, but had long since shifted its focus to business customers. "There was a certain amount of variability in terms of who was deeper in each of those sectors," Malloy says. "Telespectra, for example, was clearly deeper in backhaul. Our intent now is to focus on those three areas across the whole company."

Even from the perspective of technology, there is not much to do, according to Malloy. All three companies used a mix of license-exempt and licensed wireless technologies. Even before the merger was completed, a certain amount of rationalization of the technology base had already occurred, he says. The only constant he mentions is Motorola's Canopy technology, which was at the heart of the original Sparkplug's strategy and will apparently continue to play a key role.

Nor will Sparkplug Inc. consolidate its network operations centers (NOCs). All three companies already had multiple NOCs and all had adopted a virtual NOC approach that means any part of the network can be managed from anywhere. That will continue on a broader scale in the merged company.

Malloy calls Sparkplug Inc.'s business "very localized," meaning the fact that the company does not have a national or even a contiguous regional footprint will not hinder it.

"Not many are looking for a national buy anyway," he says. That means the competition is also very localized. It's mainly incumbent wireline providers: AT&T, SBC, and XO Communications in Illinois, for example; Qwest and XO Communications in Arizona.

The company's "sweet spot" is small to medium size enterprises (SMEs) that already have a communications supplier and are either looking for a more reliable or cheaper alternative, or are looking for diversity to ensure reliability. They need more and more bandwidth to support new applications such as voice. Some are also looking for scalability—the ability to increase available bandwidth on short notice.

"Given all the billions of dollars pumped into telecom in the 1990s, it's amazing to me that even in a metro area like Chicago, there are still a high number of outages and time to restore is far too long," Malloy says. Although Sparkplug does not offer service level agreements (SLAs) guaranteeing percentage up time, the company consistently hits "four nines" (99.99 percent availability), he says. "Relative to the stability of the wired networks, we're equal to them, and on some days we're better."

The company can also undercut wireline prices and provision service much faster—in some cases, the same day, and easily within 24 to 48 hours. And it can increase a customer's bandwidth almost instantly in response to a call or e-mail.

What does Sparkplug need to succeed? Funding has been taken care of. Ignition Partners and The Greenspun Corporation, the Las Vegas-based holding company of entrepreneur Hank Greenspun, provided new funding to the merged company. Malloy won't say how much.

Now, he says, it's a question of practicing the "art" of providing service. It's about building a great network, offering great value, fast, reliable provisioning and good customer and technical service. "I know it might sound old fashioned or too simple, but good execution is pretty much the secret sauce."

Story courtesy of ISP Planet.

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