Question-and-Answer Session
Operator
(Operator instructions) And our first question comes from Frank Louthan from Raymond James. Your line is open.
Frank Louthan – Raymond James
Great, thank you. Can you give us an idea of looking at customers that are coming to you, what percentage are changing off of the TDM based products or some less efficient platforms as they are migrating over to your Ethernet and more efficient platforms? And how is that going to changed? And then looking forward, you obviously going to continue see possibly some revenue pressure and so forth with the economy, do you still feel committed to the internal investment projects that you made over the years? Is that something you might slow down a bit to hold margins in? Thanks.
Larissa Herda
You know Frank, I couldn't give you an exact percentage on what customers are, but it's a significant number of customers, and I would say that the majority of customers are doing that migration, the customers that we are selling to. They didn't have Ethernet before and we are bringing it to them as a brand-new product offering. With regard to our internal initiatives or more strategic initiatives, is that what you're referring to?
Frank Louthan – Raymond James
Yes.
Larissa Herda
Are you talking about things like network expansion, co-location expansion, product expansion?
Frank Louthan – Raymond James
I guess all those things, and various products you talked about, internal projects that you’ve discussed in the past that you’ve invested in, that similar pressure on margins not as obvious to us, but are those kind of things that you are going to continue to see the need to keep investing in it aggressively with the economy where it is and the direction of the top line relative to 12 months ago, or is that something you are going to back off a little bit from, which have some positive margins impact?
Mark Peters
Frank, lot of those investments really are the capital investments and obviously they pull along some costs, we think we have to put in some network that have ongoing costs, and the people associated with implementing them. But we are going to continue this year building out additional co-location space, back in the first quarter we are completing some projects, we commenced in the last year. There is also some network expansion in a couple of markets. So we will keep doing that this year. Now, we actually look at those as a bit of success based, not in our traditional sense of success based. Let me just use few co-location facilities for instance, before we expand space, we frequently have anchored tenant that have already signed contract before, we then go to the next phase and the next phase of our co-location facility. And let’s understand, we are not doing 25,000 square foot build out in these locations. They are generally 5,000 to 10,000 square feet on a high end. So, very, very measured expansion. But having said that, we are taking a closer look at some of those to make sure that the demand is closed in to when we are making those investments. So, the timing might fight a little bit on the project throughout the year. But we are not doing any wholesale pull back on those kind of projects.
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