Rumor: Broadweave on UTOPIA?

I received word from a reliable source at a service provider that Broadweave may be considering joining UTOPIA. This information was passed along from a company that both of them do business with. According to this company, Broadweave has stepped up its outsourced call center operations in preparation for adding new customers on UTOPIA’s network.

UTOPIA and Broadweave have had an acrimonious working relationship in the past stemming from the entanglement between UTOPIA and iProvo regarding the head-end assets. This was no doubt hurt further by ex-CEO Steve Christensen’s forceful and demanding management style. The question is if the upending of upper management is enough to mend the relationship to the point where this rumor becomes fact.

If true, this would be a really good (and smart) move for Broadweave. They’ve hit a brick wall with adding customers on iProvo and are under a “do or die” deadline of February when the reserve runs out of cash. The rumors that they will soon be booted from Traverse Mountain also persist, though nothing new has developed. Getting access to the tens of thousands of UTOPIA homes passed and preserving some of their Traverse Mountain customers could give them the revenue needed to pay off the iProvo bonds and better leverage their head-end and NOC facilities.

Of course, we should also ask if Broadweave would be good for UTOPIA. Customer service complaints still persist and the company may not have the cash available to market to new customers unless EsNet makes additional investments. Broadweave has also failed to deliver video to Traverse Mountain despite the acquisition of a head-end, something I understand to be one of the main reasons for that development’s discontent. There’s also the matter of going from a geographically condense market to one spread over a 120-mile stretch, something that could drive their install costs up.

We should also wonder if Broadweave joining an open network like UTOPIA would signal that they’re ready to give the wholesale model another shot in Provo. Apparently closing the network wasn’t enough to staunch the flow of red ink as they claimed it would. Outside providers have money to spend on snapping up new accounts while Broadweave is charging around $600 for installs (and, I should note, not offering a discount on monthly service as a result). It’s entirely possible that a reciprocity agreement with UTOPIA providers to give them access to the network could result in higher overall revenues even at the expense of retail customers. Research from The Yankee Group suggests that an open provider model generates more revenue than adding lots of extra services, revenue that Broadweave needs.

So what do you think? If this happens, will it be good for Broadweave, UTOPIA, both, or neither?

Rumor: Management Shake-Up at Broadweave

Word around the campfire is that EsNet isn’t very happy with how Broadweave is doing and plans to find a new operations manager as part of taking a more active role in the company. I’ve confirmed with with two sources, so it seems pretty solid. One of the sources claims that CEO Steve Christensen may be out of a job as part of the reorganization. It’s good to hear that EsNet is trying to fix what’s broken but will it be enough to right the ship? There haven’t been any reports of it so far, but I’m willing to bet that Broadweave made their bond payment from the reserve fund yet again and is on-track to do so next month.

iProvo Deal Closes: Sorenson Gone, EsNet Takes Their Place

Seems that the rumors were true: Sorenson took a long, hard look at the sale of iProvo to Broadweave and said “no thanks”. Despite this, Broadweave managed to line up alternate funding that appears to be an amalgation of EsNet and some of Broadweave’s existing investors including Fraser Bullock of Sorenson. Broadweave is playing thier hand close and isn’t talking numbers, so I’d be interested to know what the final deal is. After all, if we’re back to talking letters of credit and not money in the bank, we should be quite concerned that these letters are spread a bit thin.

Broadweave also won’t talk numbers. They won’t disclose the number of subscribers they have or the revenues they are receiving beyond vague statements like “the numbers are higher than expected”. While I can appreciate a business’ right to proprietary information, the public financing aspect of the deal means additional public scrutiny is a must. The rumor mill is that both Nuvont and Veracity plan to aggressively pursue new subscribers and many customers who’ve gotten fed up with the dwindling VOD options, flaky program guide and no after-hours NOC have been evaluating switching their provider.

Good luck Broadweave, but it seems that you aren’t totally up to the challenge.

h/t: Capt. Video for posting a link to the Daily Herald story.