Recently Fibernet announced its 1Q08 results.  Fibernet’s annualized revenue is approaching $55M; it grew 16.5% from the 1Q07; its EBITDA increased by 41% over the same period.  Fibernet’s EBITDA as a % of revenue for 1Q08 was 18.4%. 

Fibernet also announced a major expansion of its business.  It must be feeling pretty good about the bandwidth market.  Soon thereafter, it announced a buyback of their stock.  Perhaps it is a bit less enthusiasic about investing its excess cash in expansion. 

Fibernet is one of the remaining players in the Fiber Telecom Texas Hold’em tournament.  However, their seat is at table 2.  Their chips, though being eyed by others, leave it with modest manuevering room.  But the great thing about Texas Hold’em is that it only takes a few good hands to move up the chip leader board. 

Fibernet is as much of a colocation company as it is a bandwidth company.  Its facilities are primarily in the metropolitan NY/NJ area.  Its primary carrier hotel facilities are 60 Hudson Street, 111 Eighth Avenue, and 165 Halsey Street–all well recognized carrier hotel addresses to the telecom crowd. They have also established eight or so other secondary carrier hotel facilities in New York City, Long Island and New Jersey and a small presence in Los Angeles. 

Fibernet has leased or IRU’ed fiber to connect up these sites.  From a facility based perspective, that is about all they have.  They do, however, have an offnet business akin to the old Universal Access.  Their revenue is about $55M and they report $10M of EBITDA.

Tomorrow I will post some recent developments at Fibernet.

How did a company whose frachise centered on Shamanistic Practices of Native Americans become part of the Fiber Telecom Texas Hold’em Tournament?

A company called Fibernet was fomed on August 10, 1994.   It joined the telecom fiber race and employed the strategy of Aesop’s Tortoise.   By December of 1998, it spent $3.6M and, cumulatively over its first four years of existance, it reported no revenue. 

Leveraging these exciting developments, Fibernet decided to go public.  To accomplish this, it sold itself to Desert Native Designs.  As covered in yesterday’s post, DND’s business was “producing and marketing drums, rattles, and other specialy crafts related to the shamanistic practices of Native Americans”.  After much strategic deliberation last over a latte at Starbuck’s, DND changed its name to Fibernet and its priority shifted to bandwidth and colo instead of drums and rattles.

Santo Petrocelli Sr. served as chairman of Fibernet from inception through to perhaps 2005.  Santo was the Chief Executive Officer of Petrocelli Electric Company.  Years earlier, Santo sold another Fibernet–FiberNet USA–to MFS.  Santo apparently was fond of both the fiber business and the Fibernet name. 

Fibernet went through several presidents and CEOs.  Lawrence S. Polan was president in 1998; Frank Chiaino in 1999; Michael S. Liss followed him in 2000; most recently, John Deluca became president in 2005 (and Liss became Chairman).   What happened to the business during these years?  What is Fibernet’s current status?  Tomorrow the story will continue.

 In the 1990s and 2000s, a whole bunch of companies went out and built fiber optic networks.  Consolidation reduced the 100+ companies to a few dozen.  The Fiber Telecom Texas Holdem Tournament is my framework for telling the story of this work-in-process consolidation.

In 1997, Desert Native Designs was a public company which was formed to “engage in the business of producing and marketing drums, rattles, and other specialy crafts related to the shamanistic practices of Native Americans.”

Fast forward to 2008 and this entity occupies a valuable seat in the Fiber Telecom Texas Hold’em Tournament. Though they do not have a seat at the final table, this fiber-based telecom company has a respectable number of chips in front of them and are among the stronger players at table 2. 

Who are they?  How did they get there?  Perhaps a reader will post a comment and let us know.  Else, I will continue their story tomorrow.