Cogent Communications offers a compelling sales pitch: data at the speed of light. The company operates a fiber-optic data network that serves customers in North America, Europe, and Japan. It offers dedicated Internet access and data transport services to businesses through Ethernet connections that link its 44 data center facilities directly to customer office buildings. Clients include financial services companies, law firms, ad agencies, and other professional services businesses. Cogent also sells access to its network and provides colocation and modem management services to ISPs, hosting companies, and other high-volume bandwidth users.
Cogent does business in 185 metropolitan markets, serving almost 2,000 connected office buildings, most of which are multi-tenant. Its network is made up of in-building riser facilities, metropolitan optical fiber networks, metropolitan traffic aggregation points, and inter-city transport facilities.
Cogent has offices, data centers, colocation facilities, and points-of-presence across North America and Europe. North America (mostly the US) represents about 80% of sales; Europe makes up the other 20%.
Sales and Marketing
Cogent employs a direct sales approach that includes telemarketing. In 2014 it launched a channel partner program to leverage its relationships with national telecommunications master agents such as WTG and AB&T Telecom.
The company generates most of its revenues from customers connected directly to its network (on-net customers), while clients served through other carriers' facilities (off-net customers) account for a quarter of revenues.
Cogent has enjoyed steady revenue growth over the past decade; overall sales increased 10% in 2013 to $347 million as its customer base grew from almost 35,000 to 40,000. Profits have been less consistent as its business is capital-intensive; however, in 2013 net income grew to a record $56 million due to a $49 million one-time income tax benefit.
The company has said that it is focusing on expanding its on-net customers; with multi-tenant office buildings, the customer base is built in. It has also expanded its sales force to address a broader range of clients. Cogent is also investing in its network infrastructure to reach more clients in areas that represent significant concentrations of Internet traffic.