CAIS Closed - CAIS Internet Inc - Brief Article

ISP Business, Sept, 2001

Apparently business travelers aren't utilizing the broadband connections that are becoming available to them while they're on the road. At least that's the conclusion being drawn by executives at national ISP CAIS Internet, the early leader in the race to wire hotels and multi-dwelling units across country.

CAIS, whose backbone network covers 38 markets and connects more than 17,000 hotel and business customers across the country, has announced a top-to-bottom restructuring that will take the company out of the hospitality and MDU markets and into the competitive national ISP business.

"Something happened when they got into those hotels and MDUs. The usage was exponentially less than they had anticipated. (The take rate) was 10 percent of what they had calculated," explained Michael Lee, who shareholders brought in as CAIS president and CEO on March 17, 2001 to refocus the company toward a bundled data services model, and hopefully profitability.

According to Lee, only 10 percent of the company's revenue was coming from the hospitality and MDU markets, which accounted for 95 percent of the company's costs.

Lee pared operations in short order, from 800 employees to less than 400, from 12 locations to just four, from a variety of hotel services to less complicated meeting and conference services. Lee also installed new management, laden with Internet and data experience.

The company plans to refocus its efforts on selling high-capacity lines off its network, DSL connectivity (the company recently purchased business DSL customers from PSINet), Web hosting and other bundled enterprise services. Also planned for the near future: a name change to Ardent Communications, pending shareholder approval later this year.