Ntelos in Financial Trouble

Ntelos (nee Intelos, nee CFW, as in Clifton Forge Waynesboro Telephone Cooperative) failed to pay their interest payments, due yesterday, to bondholders. They were scheduled to pay $24.6MM, but failed to do so. Ntelos has 30 days before their creditors can take action. A year ago, they had $7.3MM in cash — now they’re down to just a hair over a half million. The company went from a small telephone co-op to a big wireless and Internet company beginning in the mid 90s, and they now provide services like paging, DSL, cable television, wireless Internet access, website hosting, and PCS in five states. The Washington Post has the story, and Ntelos has a relevant press release on their site. 02/20 Update: Looks like Standard & Poor’s has cut their credit rating, and Ntelos is closing a call center, selling the $8MM building, and moving 100 jobs, as a cost-cutting move. It’s not expected that many of the employees will move from the Portsmouth location to their Waynesboro or Daleville locations, because the pay is around $9/hour.

31 Responses to “Ntelos in Financial Trouble”

  • If Ntelos goes out of business, I am so screwed. I’ve had a PCS with them since they first started offering that service, and I’m completely dependent on it. (I don’t have a home phone or a business phone, just mobile phone.) Changing my number would really suck. I’d hoped to have this number for years and years to come. The entirety of my Internet connectivity is based on having a DSL with them with a static IP. I’d like to hope that somebody would buy them that could keep things relatively stable, but if not, it wouldn’t be the first time that big tech company went out of business and left thousands of people without so much as a dial tone.

    The worst part is that they were doing just fine as CFW, to the best of my knowledge. Then they had to go and get too big for their britches, buying Cornerstone and other PCS companies and such. I hope they ride this out OK.

  • It only costs $500 a month to lease a T-1 line (only?). So you lease a line, you sign up ten wireless subscribers @$50 and maybe another dozen on modems @$15 and zowie, suddenly Waldo.net really is a network. Then some damn fool corporation buys you out like Ntelos bought out Cornerstone, and zip–Waldo is a millionaire.

  • So, I guess you’re a millionaire by now, right?

  • you’d be just fine. I know just how you feel; I’ve been waiting for more than two years now to be able to keep my one and only phone number and switch my service provider (*@$# SunCom). The current projected date for wireless number portability is November 23 of this year (according to this article) — if they don’t delay it again because the damn carriers keep whining. If Ntelos can stick it out for nine months, you might be OK.

  • Has anyone done a study on the inefficiencies of market deregulations a la Adam Smith? Conservatives like to brandish the “efficiency” argument of free markets, but, other than human economic casualties (like Waldo is probably going to have to work hard to get himself out of), has anyone tried to put together figures for *lost* efficiencies? As you may or may not know, euro telco service is light years ahead of U.S. You can be in Belgrade, Yugoslavia and expect perfect connections to Madrid, Spain because of a standardized digital network.

    But in order to get that kind of reliable / quasi permanent product, there has to be both economies of scale *and* long-term planning, the type of which is virtually unseen today in American business, due to the desire to please the stockholders upon every damn fiscal quarter.

  • Um, right. Because that’s all very easy. And cheap. Sure.

  • That’s a shame. I had DSL from them for over a year and had mostly excellent service from them. I’ve switched to Sprint since then and have been equally pleased, though, so it won’t be a terrible loss in the high-speed internet field.

  • I have just ask someone here who works for Ntelos. He and others in the company feels that someone will just buy them out. He even says that might be good for customers because the newer company will offer more things to your packages.

    Don’t worry, I don’t think the new owners will change anything.

  • 1. Rent a T1

    2. Get in the DSL business.

    3. ????

    4. Millionaire!

    Just a little Slashdot.org humor… :)

  • *@$# SunCom

    I hate SunCom so much that I put up a webpage, a couple of years ago, about how much that I hate them. Mysteriously, that page is gone from my website. That’s weird. Anyhow, it can be seen via Archive.org for the time being.

    Oh, and three cheers for number portability. I was really irritated when that got pushed back. Number portability will be a wonderful thing.

  • My fingers would break off before I ever finished a page like that for my experiences with Sprint.

    If I could make one recommendation for new-borns, I’d have to give them "Avoid Sprint like the plague" instead of "Live life to the fullest".

  • "It only costs $500 a month to lease a T-1 line (only?)."

    Uhhh, depending where you are, it could cost that much just for the line, at the other end? NOTHING. Just for a fractional T1 to a national provider you’re looking at well over $1000. A decent router? Maybe $50,000. Try again.

    "you sign up ten wireless subscribers @$50"

    Ok, well you need access to a wireless network. Perhaps you can lease access with a national provider, but be prepared to pay out the ass. You’ll also need an ATM line to that wireless provider, and to sprint so those calls can go out over the phone network. While you’re burning money looking for subscribers your investors are at your front door with burning torches and a battering ram.

    "maybe another dozen on modems @$15"

    A PRI is about $600/mo. with a dozen customers you have on average 1-3 online at a time, leaving you about 20 lines completely unused. Drop another grand on a modems. Dialup is probably the least profitable of all telecom businesses. Add to that the greif of zillions of idiots calling you because they forgot to plug their computer in. You’ll loose your mind.

    You didn’t mention DSL. Unfortunatly sprint owns all the copper, and they can simply deny you the ability to lease it. Unless you’re a CLEC, and even then they’ll delay all your installations for 90 days while your customers go someplace else.

    "Then some damn fool corporation buys you out like Ntelos bought out Cornerstone"

    Yeah, they’ll pay you about $30 per customer if you’re lucky. You’ll make that much in a few months, its better to keep the customers.

  • Sprint DSL is good.

    Sprint telco, well…

    It’s amazing that they’re owned by the same people. The difference is really striking.

  • I don’t know where you are shopping, but I know for a fact that fractional T-1’s (512k) are available cheaper. Try Adelphia Business Services. I think we’re paying about $500 or so.

  • You left out "buy a coffee pot" … gotta have coffee to become a millionaire.

  • Why not just "say no" to cell phones? Humanity survived for thousands of years without them – are they that essential?

    I have a whole house full of the latest toys – but not a single cell phone. It’s sort of liberating to be out of the house and have people not be able to get a hold of you.

  • Obviously your friend is not aware of the dismal state of affairs of the telecom industry. Considering many of the potential buyers have problems of their own, I would not count on someone jumping up to buy a broke company that obviously has a considerable amount of debt.

  • Yeah, but I know that 20 years ago I paid a lot more than 5 cents a minute for long distance … :)

  • The [much] more reasonable prices today (in long distance, be sure to say that), have nothing to do with deregulation. It’s got to do with higher technology and healthy competition. Deregulation is not synonymous with competition, just as regulation is not the same as monopoly.

    In other words, as Europe has proven, regulatory smarts can in fact foster competition. The difference is that folks other than profit mongers decide what to compete on. In the case of Europe’s digital wireless network, telco providers compete on price and service rather than on size of network (‘cuz the size is the whole of Europe whether you’re a small fry startup or a big-ass legacy national telco) and other non-customer oriented priorities.

  • Here here to that. Many gizmos here (all useful, I think) but no cell-phone. I’ll buy one when they can be used like phone cards: buy a little amount for emergency and keep it in your car, but no long term contracts and especially no silly chit chat all day long because… it’s free on weekends?

  • Adelphia’s service is sub optimal, but thats just my opinion.

    You’re probably getting a deal because the phone lines you buy from them are on the same T1 as the fractional circuit. If you didn’t have phone service, you’d have to doll out $300/mo or so to sprint for the circuit, then another $500 to ABS.

  • Amen brotha! Sadly our culture is addicted to cell phones, phone companies are even phasing out public phones.

    Its just a radio! Thats all it is, a little radio. Personally I think the airwaves should be free for all to use, especially with the density available with CDMA. They’ve convinced us that we should pay by the minute to use a local phone line. Oh you get free long distance? Well isnt it strange you’re paying 5-10 cents a minute to make the call….

    If people screaming into their phones in public annoyed you, wait until you hear someones phone beep and then someones voice come blaring out. Its that damn walkie talkie feature. I have been tempted to grab peoples phones and stomp on them.

    There is a device in europe that jams cell phone service within a small area, they use it in movie theaters to keep people’s phones from ringing. I think this thing is great, I want to carry one around with me everywhere I go. Sadly US law doesn’t allow such devices, even on private property.

  • in the past year or so, i’ve begun paying attention to the kids walking around grounds here at UVa–in particular, to the kids walking around with a cell phone to their ear, talking to someone. it’s really odd when you think about. here they are, in the midst of rushing humanity, surrounded by other people, and they are totally inwardly focused–they hardly see the people around them, they’re not paying attention to their surroundings. instead, they’re engrossed in this conversation with someone who ISN’T there with them. It’s like saying no to the present world in favor of some distant, interior world.

  • you are right, my friend is a idiot. Especially, when that is the rumor going around Ntehlos. What does he or half the company knows?

  • My 2 cents,

    Sprint bill each month: around 60 dollars. Plus you got telemarketers calling every freaking day for you to sigh up with their long distance.

    Cell phone bill: around 40 dollars with no freaking telemarketers and you get long distance. Also you don’t get tax on everything like with Sprint.

    Also Sprint DSL – $60-70. That internet is great however with Alphedia Powerlink – $25. Unless you are uploading gigs of stuff, you will not tell the difference.

    Screw Sprint and the monoploy it came from

  • Why not just “say no” to cell phones? Humanity survived for thousands of years without them – are they that essential?

    Well, that’s silly. Why don’t you leave your pants at home, too? :)

    My cellphone is cheaper than a landline. If I want to, I can leave it at home and use it just like a home phone. There’s no reason why I have to take it with me. It’s just like a landline, only without the line.

    Albert Einstein, when asked to describe radio, replied: “You see, wire telegraph is a kind of a very, very long cat. You pull his tail in New York and his head is meowing in Los Angeles. Do you understand this? And radio operates exactly the same way: you send signals here, they receive them there. The only difference is that there is no cat.”

  • Yes, but don’t you need the cat to meow to get decent modem connections?

  • Also Sprint DSL – $60-70. That internet is great however with Alphedia Powerlink – $25. Unless you are uploading gigs of stuff, you will not tell the difference.

    Nope, Adelphia Powerlink starts at $45/month ($40 if you already own a modem, which few do). In addition, my experiences with Powerlink (and cable modems in general) have been thoroughly unimpressive. The speed is very inconsistent, often dipping well below that of DSL during peak usage hours, and the connection reliability isn’t anywhere near as good as what I’ve experienced over 4 years of DSL. Not to mention that you simply can’t get fast upload speeds or multiple IP’s, both of which Waldo needs to run his servers.

  • I have to disagree with you on that will. I have a package with Adephia that for me cost 71 with cable and internet. I had DSL and while it is true that I really didn’t have any issues. The only differences was with the file sharing programs like Kazaa. I would notice lag with that on. I would have butt loads of people downloading from my PC. With DSL, I never saw any downtime.

    I live in a congustive area so chances are people are using cable in my area. I rarely notice any lag with Kazaa turned off.

    As for the connection reliabity, I never had any problems with cable nor the network set up. I just believe that cable is a cost effective solution other then dail up or DSL or the hated AOL.

  • Humanity survived for thousands of years without computers, yet the Y2K bug threatened to bring the international economy to a screeching halt.

    That’s not to say I like cell phones. Actually, I hate them. For the time being, I can live without a cell phone, but as I plow into my career, I can certainly picture myself in a situation where I couldn’t live without one, at least on a professional level.

  • New York City recently passed an ordinance prohibiting cell phone and pager use in movie theaters, museums, plays, concerts, etc…

    If you can’t jam ’em, ban ’em.

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