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Author Topic: Major outage at broadband biz 186k  (Read 2709 times)

kitz

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Re: Major outage at broadband biz 186k
« Reply #15 on: December 16, 2016, 10:40:27 AM »

Kitz it depends really, fast.co.uk as a entity still exists for example, they didnt just sell broadband.

As mentioned in my post above, Fast were reselling 186k.
186k 'white labelled' their products and sold to several small ISPs such as Fast and Firenet.

 
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But directors tend to try to split off different parts of the business so one part can fail without affecting the other, whether thats the case here I dont know but ofcom I think should look into it and if possible make an example of them.  Else it sends a message its ok to pull the rug at any given moment.

How on earth can you fine or penalise the likes of Fast?   Yes they do also have the hosting side of things, but they themselves are an innocent party in this.   They will have been paying 186k and found themselves with their own supplier cut off without any prior notification.

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Agreed its a problem in many sectors, especially retail, how often do we see them staying open for the christmas rush and then go bust in january., or even christmas eve/boxing day.

It is, they hang on so they can get as much income in as possible.   Its just as c6em has explained, that quite often many businesses do run very near to their limits especially at certain times of the year.   We'd see it all the time when I was in business lending and had to analyse audited accounts. 

You often see seasonal trends.  Before say xmas it may start getting close, but the company may have a good retail season over christmas and manage to survive another year.   If that season was bad then the lenders will foreclose knowing that if the company cant make it over the xmas period then they wont be able to manage the rest of the year.   We'd often call in the lending for hotels/guest houses etc at the end of 'The Lights'
because this is the point when if they haven't earned enough income during peak, then there is no way they can survive the out of season periods.
Banks dont need audited accounts to call in lending, they see the day to day balances and are able to immediately see the point at which extending will not be beneficial.

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But directors tend to try to split off different parts of the business so one part can fail without affecting the other,

There's often a valid reason for that too.
When one supplier - or even one main purchaser goes bust - it often impacts not just the general public, but also other businesses. 
A business may be reliant on performance of another company for their own success.  If that other company goes under then they could too.

For example my brother worked for a large wholesale importer of goods.  The company was doing well, it had several parts - ie Xmas, Garden Furniture, and toys. 
One of their major customers who retailed on the high street in most large towns went bust about 8 years ago.
My brother's company had supplied this large retailer with a lot of toys and christmas stock (ie trees/decos).  As in most business the retailer gets the goods then pays later, many companies not settling bills until a few month later.   The company that went bust owed 100's of thousands of pounds to their wholesalers.  Because the amount owing from the retailer was so large, this severely affected the wholesaler.  They'd supplied the goods but didn't get paid.   The toy dept in particular suffered extremely badly and it took that company out too as there was no way they could ever recover such a huge amount of money.  Garden Furniture remained unaffected.

So to bring it back to Fast.   They may well have split their broadband provision from hosting (I dont know if they legally have).   But the fact 186k has gone under, will likely mean that Fast will too unless they can find another supplier quick.    If the hosting is kept as a separate company then it means they at least keep that side running which is where most of their income comes from. 
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Chrysalis

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Re: Major outage at broadband biz 186k
« Reply #16 on: December 16, 2016, 03:13:10 PM »

c6em what you describe is unhealthy trading conditions where going bust is inevitable, just a question of when not if.

Business relying on lending just to cover operational costs when they are established brand names with decades of trading history shouldnt be happening.  For startups yes is ok, also for capital expenditure, sure.  But for day to day trading no.

Thats akin to a individual relying on credit cards long term for day to day expenses because their bank is dry and that trouble is a foregone conclusion without a miracle happening.

Note by lending, I am not including things like getting stock on pre payment arrangements which I know is common practice.
« Last Edit: December 16, 2016, 04:25:34 PM by Chrysalis »
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renluop

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Re: Major outage at broadband biz 186k
« Reply #17 on: December 16, 2016, 03:51:01 PM »

A lot of sensible comment. The only comment from me is that sometimes ofttimes there seems to be a reluctance to act to disqualify directors, where history shows incompetence or worse in running companies.
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c6em

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Re: Major outage at broadband biz 186k
« Reply #18 on: December 19, 2016, 11:38:58 AM »

c6em what you describe is unhealthy trading conditions where going bust is inevitable, just a question of when not if.


The best example in the real (non digital/tech) economy of this in the public domain is Ocado the "upmarket" online grocery delivery business.
Set up in year 2000.....and never once until last year(2015) did it ever make a profit.
Totally reliant for 15 years of endless losses on equally endless operational and capital funding from its financial backers.
See BBC article celebrating the first profit!
http://www.bbc.co.uk/news/business-31108569



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