DSL.net narrows loss, plans to expand

DSL.net today reported a narrower loss in the second quarter off increased revenues and tighter spending controls, but told investors it planned to loosen its belt the next two quarters to expand its customer base.

The New Haven, Conn., based business CLEC ended the quarter with 21,500 installed DSL lines, serving its small-and medium-sized enterprise customer base. While DSL.net held even on its subscriber numbers from the previous quarter, company officials said they managed to weed the network of unpaying and problem customers, replacing them with more profitable subscribers. This resulted in a 12% increase in revenue from $10.3 million to $11.6 million, compared with last year’s second quarter. The carrier’s net loss fell from $56.2 million to $9.4 million over the same period, and its adjusted loss before interest, taxes, depreciation and amortization fell 92% from last year’s second quarter to a $3.8 million.

CEO David Struwas said DSL.net has been trying to cut costs and build up its balance sheet in the down market, but now that the carrier has $20.8 million in the bank, it plans to become more aggressive, doubling its 22-person sales force and hunting out bargains in the deflated market.

“We continue to believe we are well positioned to capitalize on acquisition opportunities in the broadband arena,” Struwas said. “However we remain very selective.”

DSL.net earlier this week announced it was acquiring an unnamed number of DSL lines from Abacus America’s Alpus.net division.