Case | HBS Case Collection | November 2001

Sigma Networks, Inc.

by Thomas R. Eisenmann and Christina L. Darwall

Abstract

Sigma Networks, a venture capital-based telecommunications start-up, provides metropolitan area networks (MANs) that use fiberoptic lines to connect local Internet service providers (e.g., ISPs, hosting firms) with a long-haul ("backbone") network. MANs represent a capacity bottleneck in delivering broadband services. This case describes the challenges Sigma faces in exploiting this opportunity, including: 1) deciding on its network architecture (build vs. lease dark fiber, Ethernet vs. sonet focus); 2) deciding on which customers to target (enterprise vs. telecom carriers and Internet service providers); and 3) deciding how many metro areas to pursue simultaneously in a capital-constrained environment.

Keywords: Business Startups; Customers; Capital Budgeting; Venture Capital; Strategic Planning; Technology Networks; Telecommunications Industry;

Citation:

Eisenmann, Thomas R., and Christina L. Darwall. "Sigma Networks, Inc." Harvard Business School Case 802-103, November 2001.