Looking to get its hands on some more bandwidth, IDT Corp.‘s subsidiary IDT Telecom has snapped up certain Indefeasible Rights of Use and equipment from bankrupt Star Telecommunications.
Star originally purchased the assets, which represent long-term capacity on U.S. nationwide fiber networks operated by Qwest and Broadwing, for $68 million in 1998. Although IDT did not disclose the exact amount it paid for the assets, company Chairman Howard Jonas said, “We got this fiber at a great price.” The asset purchase was approved by the US Bankruptcy Court in Wilmington, Del.
IDT anticipates it will recoup the cost of the purchase in under a year, mainly based on the fact that it would have had to sink quite a bit of money into leasing network capacity from other carriers.
Under the terms, IDT paid for the right of use of the network’s capacity for the remainder of the term, operations, maintenance and certain equipment.
“At the rate we’re growing, we need to get our hands on as much bandwidth as we can,” said Jonas. The network will enable IDT to carry increased voice and data traffic into 13 metropolitan cities, including Boston, New York City, Washington, D.C., Atlanta, Miami, Houston, Dallas, El Paso, Phoenix, San Diego , Los Angeles, San Francisco and Las Vegas.
In December, IDT snatched up the assets of bankrupt Winstar in a $42.5 million deal — $30 million in cash and $12.5 million in IDT Class B common stock. IDT made a play for Winstar’s assets to give it access to the last mile.
At the time of the Winstar acquisition, Jonas said, “It is our intent to become the greatest telecom company in the country.”
