Cogent Communications is a multinational internet service provider whose network spans more than 51,200 intercity fiber route miles and 15,500 metro fiber miles. Cogent provides service in over 160 markets across 30 countries in North America and Europe. Cogent carries approximately 37 petabytes per day of Internet traffic and connects to approximately 3,500 networks.
Cogent Communications Group, Inc., incorporated in 1999, is a facilities-based provider of Internet access and Internet Protocol (IP) communications services. Its network is specifically designed and optimized to transmit data using IP. The Company delivers its services primarily to small and medium-sized businesses, communications service providers and other organizations through approximately 21,300 customer connections in North America and Europe. The Company provides its own on-net service at a speed of 100 Megabits per second through its own facilities. Its customers in multi-tenant office buildings are law firms, financial services firms, advertising and marketing firms and other professional services businesses. It also provide on-net Internet access to certain bandwidth-intensive users, such as universities, other Internet service providers (ISPs) and commercial content providers at speeds of up to ten Gigabits per second.
The Company also provides Internet connectivity to customers that are not located in buildings directly connected to its network. It serves these off-net customers using other carriers' facilities to provide the link from its customers' premises to the network. The Company operates 39 data centers comprising over 352,000 square feet throughout North America and Europe.
The Company’s network is comprised of in-building riser facilities, metropolitan optical networks, metropolitan traffic aggregation points and inter-city transport facilities. Its network serves over 140 metropolitan markets in North America and Europe and encompasses over 1,035 multi-tenant office buildings located in commercial business districts; over 410 carrier-neutral Internet aggregation facilities, data centers and single-tenant buildings; over 330 intra-city networks consisting of over 13,300 fiber miles; an inter-city network of more than 46,100 fiber route miles, and multiple high-capacity transatlantic circuits connecting the North American and European portions of the network.
The Company’s inter-city network consists of optical fiber connecting cities in North America and Europe. The North American and European portions of the network are connected by transatlantic circuits. Its network was built by acquiring from various owners of fiber optic networks the right to use typically two strands of optical fiber out of the multiple fibers owned by the carrier. In the metropolitan area the Company’s on-net Internet access service is connected to one or more routers connected to one or more of its metropolitan optical networks. These metropolitan networks consist of optical fiber that runs from the central router in a market into routers located in its on-net buildings. The router in the building provides a connection to each on-net customer.
In the office buildings, the Company provides service to multiple tenants and connects its routers to a cable containing 12 to 288 optical fiber strands that typically run from the equipment in the basement of the building through the building riser to the customer location. The customer then has dedicated and secures access to its network using an Ethernet connection. The Company interconnects its network through public and private peering arrangements. It has settlement free interconnections between the network and ISPs at approximately 50 locations. The Company has primary network operations centers located in Washington, D.C. and Madrid, Spain. These facilities provide operational support in both North America and Europe.
In April 2001 Cogent announced that it would expand its network capacity to 80 Gbps due to larger than anticipated customer demand. With each OC-192 wavelength operating at 10 Gbps, Cogent began work to add seven additional wavelengths to increase its network capacity. The expansion was completed in November 2001. Around this time Cogent also received the first preferred service provider designation from Cisco Systems, its new IP+Optical Cisco Powered Network designation. Over the past year Cogent had received some $310 million in vendor financing from Cisco.
With its fiber-optic IP backbone and multiple metropolitan area network stretching some 17,400 miles, Cogent announced in May 2001 that it had secured access to its 525th building, representing more than 161 million square feet of commercial office space. Cogent had been successful in signing contracts with large real estate firms in major cities, including Rudin Management, The Trump Group, The Lurie Company, Jamison Properties, Crescent Real Estate Equities Co., and Carlyle Realty, among others. These contracts enabled Cogent to approach individual tenants to sell them high-speed Internet access.
Cogent continued to add service to more cities in 2001. In June it added service to its 10th urban market, Santa Clara, California. Within each city it served, Cogent also established one or more hub offices. Other cities serviced by Cogent included Dallas, Denver, Kansas City, Boston, and San Francisco, in addition to its original four cities of New York, Chicago, Philadelphia, and Washington, D.C.
In July 2001 an agreement with Level 3 Communications, Inc. gave Cogent access to Level 3 data centers and other buildings in 18 major business markets. The deal expanded Cogent's depth in those 18 markets and enabled service provider customers to connect with Cogent in Level 3's co-location centers. Later that month Cogent launched its service in Dallas and Houston and set up hub sites in both cities. By the end of July Cogent had gained access agreements to more than 50 multi-tenant office buildings and co-location centers in Dallas, including six of the city's 10 tallest buildings. Another agreement with TXU Communications gave Cogent fiber access to 20 additional buildings in downtown Dallas. Through its agreement with TXU, Cogent was able to offer customers high-speed Internet connectivity within 60 days in those buildings.
In August 2001 Cogent introduced its Value Added Services Program. Through the program customers could gain access to a select group of vendors who provided value-added services compatible with Cogent's high bandwidth Internet connectivity. Unlike many other Internet service providers (ISPs), Cogent did not offer additional bundled services along with its Internet connections. Rather, the company remained focused on providing customers with low-cost, high-speed fiber-optic access to the Internet. Around this time Cogent introduced service in Los Angeles, its 12th market.
In September 2001 Cogent acquired the assets of NetRail, a Tier One ISP that was in bankruptcy. Cogent planned to continue service to NetRail's customers and integrate its service into Cogent's national backbone. NetRail provided Cogent with crucial peering relationships that allowed Cogent to become a Tier One ISP and exchange traffic with other providers on a settlement-free basis. Cogent's new Tier One status enabled it to offer cost-effective Ethernet Internet access to small and medium-size businesses in major metropolitan markets. In November the company announced it had completed the upgrade of its system to handle Internet access up to 80 Gbps. By the end of 2001 the company had reached its goal of serving 20 cities by adding service to Atlanta, Orlando, Tampa, Jacksonville, Miami, San Diego, Sacramento, and Seattle.
Another significant acquisition involved Allied Riser Communications Corp., a financially troubled ISP based in Dallas. Completed in February 2002, the acquisition gave Cogent more potential customers through networks that Allied Riser had already installed in large office buildings in the United States and Canada. Following the merger-acquisition, Allied Riser became a wholly owned subsidiary of Cogent, with Allied Riser's shareholders receiving equivalent shares of Cogent. Since Allied Riser was a publicly traded company, Cogent became a public company when the transaction was finalized, and Cogent was subsequently listed on the American Stock Exchange. Around this time Cogent announced that it had landed more than $200 million in additional venture capital financing, including significant equipment financing from Cisco Systems. At the time Cogent had about 4,000 customers.
Acquiring Financially Troubled Competitors: 2002-03
Once Cogent's acquisition of Allied Riser was completed, the company's stock began trading on the American Stock Exchange on February 5, 2002. Later that month Cogent announced it would acquire, for $10 million, the major U.S. operating assets of PSINet Inc., an ISP in bankruptcy. PSINet was established in 1989 and was the first company to provide commercial Internet access. Included in the U.S. assets Cogent acquired from PSINet were its customer base, backbone network, associated equipment, three co-location facilities, and rights to intellectual property. Cogent planned to support and build on PSINet's brand name by continuing to offer PSINet services. In October Cogent announced it had upgraded PSINet's three data centers located in Los Angeles, New York, and Herndon, Virginia.
Other ISPs specializing in high-speed Internet access for businesses were also filing for bankruptcy. At the end of March 2002 competitor Yipes Communications filed for Chapter 11 protection. In April Cogent acquired a portfolio of real estate access agreements from OnSite Access, Inc., a high-speed communications provider that had been in Chapter 11 for nearly a year. Most of the access agreements pertained to buildings in New York City, with others located in cities serviced by Cogent.
In the second half of 2002 Cogent was selected by Merit Network, Inc. to deliver ultra-high speed Internet access to all 13 of Michigan's publicly funded universities. In September Cogent acquired key assets from New York-based FiberCity Networks, including its customer base and building access agreements. Following the acquisition FiberCity ceased operations. Cogent entered the Canadian market in October by opening an office in Toronto. Service in Canada would be delivered by Shared Technologies of Canada, a wholly owned subsidiary that Cogent obtained as part of its acquisition of Allied Riser Communications. Cogent made another acquisition in February 2003 when it purchased the ISP business of Fiber Network Solutions, Inc. (FNSI). Based in Columbus, Ohio, FNSI was an Internet access and co-location service provider to businesses in Ohio, Michigan, and Pennsylvania. As part of the deal Cogent acquired five co-location facilities, including those located in Columbus, Pittsburgh, and Detroit.
At the beginning of 2003 Cogent adjusted its marketing plans to reach small and medium-size companies that did not need Cogent Classic service of 100 Mbps of bandwidth for $1,000 a month. In January the company launched a 500 Kbps service for $249 a month that competed directly with DSL service. According to Cogent CEO and Chairman David Schaeffer, "We did an awful lot of market research and discovered only 45 percent of the tenants in our on-network buildings would be good candidates for our Cogent Classic service. The rest were too small to need that much bandwidth, but of that remaining 55 percent, we discovered about 40 percent fell squarely in the DSL space." Cogent's 500 Kbps service enabled it to compete with DSL carriers without having to make similar capital investments. Another benefit that distinguished Cogent's new service from DSL was that customers gained access to Cogent's entire network.
While Cogent had made several acquisitions that provided new revenue streams, the company continued to operate at a loss in 2002. For 2001 Cogent had an operating loss of $61.1 million and revenue of only $3 million. For 2002 Cogent's sales rose significantly, to $51.9 million. However, losses also rose, this time to $91.8 million. Schaeffer forecast that the company would achieve a positive cashflow sometime in 2004. Meanwhile, Cogent was surviving on venture capital financing.
Principal Subsidiaries: Allied Riser Communications Corp.; Cogent Communications, Inc.; Shared Technologies of Canada.
Principal Competitors: AT&T Corp.; Cable & Wireless plc; Genuity Inc.; Sprint Corp.; WorldCom Inc.
OVERALL
Beta: 1.32
Market Cap (Mil.): $661.49
Shares Outstanding (Mil.): 45.84
Annual Dividend: --
Yield (%): --
FINANCIALS
CCOI.O Industry Sector
P/E (TTM): 995.17 20.84 19.28
EPS (TTM): 103.66 -- --
ROI: 0.20 21.49 16.09
ROE: 0.45 23.55 17.76
Statistics:
Public Company
Incorporated: 1999 as Cogent Communications, Inc.
Employees: 200
Sales: $51.9 million (2002)
Stock Exchanges: American
Ticker Symbol: COI
NAIC: 513310 Wired Telecommunications Carriers; 514191 Online Information Services
Key Dates:
1999: Cogent Communications, Inc. is founded by David Schaeffer.
2000: Cogent completes two rounds of venture capital financing, enters into a $310 million partnership with Cisco Systems to construct its optical network, and activates its all-optical facilities-based network.
2001: Cogent completes roll-out of service to 20 cities and expands capacity to 80 Gbps over its entire network; secures third round of financing totaling $62 million and bringing Cisco partnership to $409 million.
2002: Cogent completes several acquisitions and gains listing on the American Stock Exchange.
Name Age Since Current Position
Schaeffer, David 54 2010 Chairman of the Board, President, Chief Executive Officer
Weed, Thaddeus 49 2004 Chief Financial Officer, Treasurer
Kummer, R. Brad 62 2000 Vice President - Optical Transport Engineering, Chief Technology Officer
Beury, Robert 57 2000 Chief Legal Officer, Vice President, General Counsel, Assistant Secretary
O'Neill, Timothy 55 2001 Vice President - Field Engineering, Construction and Network Operations
Schleifer, Mark 42 2000 Vice President - IP Engineering
Karnes, Jeffrey 39 2004 Vice President - Global Sales, Chief Revenue Officer
Margalit, Erel 50 2000 Independent Director
Weingarten, Timothy 35 2003 Independent Director
Brooks, Steven 59 2003 Independent Director
Liebhaber, Richard 75 2006 Independent Director
Bath, D. Blake 48 2006 Independent Director
Montagner, Marc 49 2010 Independent Director
Address:
1015 31st Street Northwest
Washington, D.C. 20007
U.S.A.
Cogent Communications Group, Inc., incorporated in 1999, is a facilities-based provider of Internet access and Internet Protocol (IP) communications services. Its network is specifically designed and optimized to transmit data using IP. The Company delivers its services primarily to small and medium-sized businesses, communications service providers and other organizations through approximately 21,300 customer connections in North America and Europe. The Company provides its own on-net service at a speed of 100 Megabits per second through its own facilities. Its customers in multi-tenant office buildings are law firms, financial services firms, advertising and marketing firms and other professional services businesses. It also provide on-net Internet access to certain bandwidth-intensive users, such as universities, other Internet service providers (ISPs) and commercial content providers at speeds of up to ten Gigabits per second.
The Company also provides Internet connectivity to customers that are not located in buildings directly connected to its network. It serves these off-net customers using other carriers' facilities to provide the link from its customers' premises to the network. The Company operates 39 data centers comprising over 352,000 square feet throughout North America and Europe.
The Company’s network is comprised of in-building riser facilities, metropolitan optical networks, metropolitan traffic aggregation points and inter-city transport facilities. Its network serves over 140 metropolitan markets in North America and Europe and encompasses over 1,035 multi-tenant office buildings located in commercial business districts; over 410 carrier-neutral Internet aggregation facilities, data centers and single-tenant buildings; over 330 intra-city networks consisting of over 13,300 fiber miles; an inter-city network of more than 46,100 fiber route miles, and multiple high-capacity transatlantic circuits connecting the North American and European portions of the network.
The Company’s inter-city network consists of optical fiber connecting cities in North America and Europe. The North American and European portions of the network are connected by transatlantic circuits. Its network was built by acquiring from various owners of fiber optic networks the right to use typically two strands of optical fiber out of the multiple fibers owned by the carrier. In the metropolitan area the Company’s on-net Internet access service is connected to one or more routers connected to one or more of its metropolitan optical networks. These metropolitan networks consist of optical fiber that runs from the central router in a market into routers located in its on-net buildings. The router in the building provides a connection to each on-net customer.
In the office buildings, the Company provides service to multiple tenants and connects its routers to a cable containing 12 to 288 optical fiber strands that typically run from the equipment in the basement of the building through the building riser to the customer location. The customer then has dedicated and secures access to its network using an Ethernet connection. The Company interconnects its network through public and private peering arrangements. It has settlement free interconnections between the network and ISPs at approximately 50 locations. The Company has primary network operations centers located in Washington, D.C. and Madrid, Spain. These facilities provide operational support in both North America and Europe.
In April 2001 Cogent announced that it would expand its network capacity to 80 Gbps due to larger than anticipated customer demand. With each OC-192 wavelength operating at 10 Gbps, Cogent began work to add seven additional wavelengths to increase its network capacity. The expansion was completed in November 2001. Around this time Cogent also received the first preferred service provider designation from Cisco Systems, its new IP+Optical Cisco Powered Network designation. Over the past year Cogent had received some $310 million in vendor financing from Cisco.
With its fiber-optic IP backbone and multiple metropolitan area network stretching some 17,400 miles, Cogent announced in May 2001 that it had secured access to its 525th building, representing more than 161 million square feet of commercial office space. Cogent had been successful in signing contracts with large real estate firms in major cities, including Rudin Management, The Trump Group, The Lurie Company, Jamison Properties, Crescent Real Estate Equities Co., and Carlyle Realty, among others. These contracts enabled Cogent to approach individual tenants to sell them high-speed Internet access.
Cogent continued to add service to more cities in 2001. In June it added service to its 10th urban market, Santa Clara, California. Within each city it served, Cogent also established one or more hub offices. Other cities serviced by Cogent included Dallas, Denver, Kansas City, Boston, and San Francisco, in addition to its original four cities of New York, Chicago, Philadelphia, and Washington, D.C.
In July 2001 an agreement with Level 3 Communications, Inc. gave Cogent access to Level 3 data centers and other buildings in 18 major business markets. The deal expanded Cogent's depth in those 18 markets and enabled service provider customers to connect with Cogent in Level 3's co-location centers. Later that month Cogent launched its service in Dallas and Houston and set up hub sites in both cities. By the end of July Cogent had gained access agreements to more than 50 multi-tenant office buildings and co-location centers in Dallas, including six of the city's 10 tallest buildings. Another agreement with TXU Communications gave Cogent fiber access to 20 additional buildings in downtown Dallas. Through its agreement with TXU, Cogent was able to offer customers high-speed Internet connectivity within 60 days in those buildings.
In August 2001 Cogent introduced its Value Added Services Program. Through the program customers could gain access to a select group of vendors who provided value-added services compatible with Cogent's high bandwidth Internet connectivity. Unlike many other Internet service providers (ISPs), Cogent did not offer additional bundled services along with its Internet connections. Rather, the company remained focused on providing customers with low-cost, high-speed fiber-optic access to the Internet. Around this time Cogent introduced service in Los Angeles, its 12th market.
In September 2001 Cogent acquired the assets of NetRail, a Tier One ISP that was in bankruptcy. Cogent planned to continue service to NetRail's customers and integrate its service into Cogent's national backbone. NetRail provided Cogent with crucial peering relationships that allowed Cogent to become a Tier One ISP and exchange traffic with other providers on a settlement-free basis. Cogent's new Tier One status enabled it to offer cost-effective Ethernet Internet access to small and medium-size businesses in major metropolitan markets. In November the company announced it had completed the upgrade of its system to handle Internet access up to 80 Gbps. By the end of 2001 the company had reached its goal of serving 20 cities by adding service to Atlanta, Orlando, Tampa, Jacksonville, Miami, San Diego, Sacramento, and Seattle.
Another significant acquisition involved Allied Riser Communications Corp., a financially troubled ISP based in Dallas. Completed in February 2002, the acquisition gave Cogent more potential customers through networks that Allied Riser had already installed in large office buildings in the United States and Canada. Following the merger-acquisition, Allied Riser became a wholly owned subsidiary of Cogent, with Allied Riser's shareholders receiving equivalent shares of Cogent. Since Allied Riser was a publicly traded company, Cogent became a public company when the transaction was finalized, and Cogent was subsequently listed on the American Stock Exchange. Around this time Cogent announced that it had landed more than $200 million in additional venture capital financing, including significant equipment financing from Cisco Systems. At the time Cogent had about 4,000 customers.
Acquiring Financially Troubled Competitors: 2002-03
Once Cogent's acquisition of Allied Riser was completed, the company's stock began trading on the American Stock Exchange on February 5, 2002. Later that month Cogent announced it would acquire, for $10 million, the major U.S. operating assets of PSINet Inc., an ISP in bankruptcy. PSINet was established in 1989 and was the first company to provide commercial Internet access. Included in the U.S. assets Cogent acquired from PSINet were its customer base, backbone network, associated equipment, three co-location facilities, and rights to intellectual property. Cogent planned to support and build on PSINet's brand name by continuing to offer PSINet services. In October Cogent announced it had upgraded PSINet's three data centers located in Los Angeles, New York, and Herndon, Virginia.
Other ISPs specializing in high-speed Internet access for businesses were also filing for bankruptcy. At the end of March 2002 competitor Yipes Communications filed for Chapter 11 protection. In April Cogent acquired a portfolio of real estate access agreements from OnSite Access, Inc., a high-speed communications provider that had been in Chapter 11 for nearly a year. Most of the access agreements pertained to buildings in New York City, with others located in cities serviced by Cogent.
In the second half of 2002 Cogent was selected by Merit Network, Inc. to deliver ultra-high speed Internet access to all 13 of Michigan's publicly funded universities. In September Cogent acquired key assets from New York-based FiberCity Networks, including its customer base and building access agreements. Following the acquisition FiberCity ceased operations. Cogent entered the Canadian market in October by opening an office in Toronto. Service in Canada would be delivered by Shared Technologies of Canada, a wholly owned subsidiary that Cogent obtained as part of its acquisition of Allied Riser Communications. Cogent made another acquisition in February 2003 when it purchased the ISP business of Fiber Network Solutions, Inc. (FNSI). Based in Columbus, Ohio, FNSI was an Internet access and co-location service provider to businesses in Ohio, Michigan, and Pennsylvania. As part of the deal Cogent acquired five co-location facilities, including those located in Columbus, Pittsburgh, and Detroit.
At the beginning of 2003 Cogent adjusted its marketing plans to reach small and medium-size companies that did not need Cogent Classic service of 100 Mbps of bandwidth for $1,000 a month. In January the company launched a 500 Kbps service for $249 a month that competed directly with DSL service. According to Cogent CEO and Chairman David Schaeffer, "We did an awful lot of market research and discovered only 45 percent of the tenants in our on-network buildings would be good candidates for our Cogent Classic service. The rest were too small to need that much bandwidth, but of that remaining 55 percent, we discovered about 40 percent fell squarely in the DSL space." Cogent's 500 Kbps service enabled it to compete with DSL carriers without having to make similar capital investments. Another benefit that distinguished Cogent's new service from DSL was that customers gained access to Cogent's entire network.
While Cogent had made several acquisitions that provided new revenue streams, the company continued to operate at a loss in 2002. For 2001 Cogent had an operating loss of $61.1 million and revenue of only $3 million. For 2002 Cogent's sales rose significantly, to $51.9 million. However, losses also rose, this time to $91.8 million. Schaeffer forecast that the company would achieve a positive cashflow sometime in 2004. Meanwhile, Cogent was surviving on venture capital financing.
Principal Subsidiaries: Allied Riser Communications Corp.; Cogent Communications, Inc.; Shared Technologies of Canada.
Principal Competitors: AT&T Corp.; Cable & Wireless plc; Genuity Inc.; Sprint Corp.; WorldCom Inc.
OVERALL
Beta: 1.32
Market Cap (Mil.): $661.49
Shares Outstanding (Mil.): 45.84
Annual Dividend: --
Yield (%): --
FINANCIALS
CCOI.O Industry Sector
P/E (TTM): 995.17 20.84 19.28
EPS (TTM): 103.66 -- --
ROI: 0.20 21.49 16.09
ROE: 0.45 23.55 17.76
Statistics:
Public Company
Incorporated: 1999 as Cogent Communications, Inc.
Employees: 200
Sales: $51.9 million (2002)
Stock Exchanges: American
Ticker Symbol: COI
NAIC: 513310 Wired Telecommunications Carriers; 514191 Online Information Services
Key Dates:
1999: Cogent Communications, Inc. is founded by David Schaeffer.
2000: Cogent completes two rounds of venture capital financing, enters into a $310 million partnership with Cisco Systems to construct its optical network, and activates its all-optical facilities-based network.
2001: Cogent completes roll-out of service to 20 cities and expands capacity to 80 Gbps over its entire network; secures third round of financing totaling $62 million and bringing Cisco partnership to $409 million.
2002: Cogent completes several acquisitions and gains listing on the American Stock Exchange.
Name Age Since Current Position
Schaeffer, David 54 2010 Chairman of the Board, President, Chief Executive Officer
Weed, Thaddeus 49 2004 Chief Financial Officer, Treasurer
Kummer, R. Brad 62 2000 Vice President - Optical Transport Engineering, Chief Technology Officer
Beury, Robert 57 2000 Chief Legal Officer, Vice President, General Counsel, Assistant Secretary
O'Neill, Timothy 55 2001 Vice President - Field Engineering, Construction and Network Operations
Schleifer, Mark 42 2000 Vice President - IP Engineering
Karnes, Jeffrey 39 2004 Vice President - Global Sales, Chief Revenue Officer
Margalit, Erel 50 2000 Independent Director
Weingarten, Timothy 35 2003 Independent Director
Brooks, Steven 59 2003 Independent Director
Liebhaber, Richard 75 2006 Independent Director
Bath, D. Blake 48 2006 Independent Director
Montagner, Marc 49 2010 Independent Director
Address:
1015 31st Street Northwest
Washington, D.C. 20007
U.S.A.