Archive by Ed Gubbins

As Frontier awaits Verizon lines, cable guys pounce

Competitors are pouncing on Verizon Communications’ (NYSE:VZ) move to sell 4.8 million access lines to Frontier Communications (NYSE:FTR) in 14 states, reaching out to Verizon customers in those areas and urging them to switch providers before the network changes hands.

In particular, Comcast (NASDAQ:CMCSA) has been targeting customers in Washington and Oregon, according to Donald Shassian, Frontier’s chief financial officer. Those attacks are made easier by the high-profile service problems Verizon customers saw in the Northeast after they became Fairpoint Communications customers, in a similar transaction. Frontier says it knows how to avoid the problems that beset Fairpoint. But in the mean time, while its deal is still pending (perhaps until next summer), Frontier can’t fight back in the markets it has yet to acquire.

“We can’t force [Verizon] to come up with a new promotion or new incentives or change their marketing,” Shassian said at an investor conference this week. “It’s been challenging to compete against Comcast’s campaign like that. We can’t advertise in those markets because we don’t have regulatory approval. That [would be] poking a regulator in the chest. You can’t assume you’re going to get something. You’ve got to sit back on your heels and hope Verizon does their best.” more

Verizon’s cloud consulting: Helping hand, foot in the door or throat to choke?

Verizon Business (NYSE: VZ) is positioning its new cloud-computing consulting offering – which fluidly combines consultation, professional services and some of the carrier’s own managed telecom/IT services – as an open-ended best-of-breed approach. The company hopes to advise enterprises on their cloud strategies, whether based on internal or third-party infrastructure or a hybrid of the two, even when those enterprises get their cloud computing services from a competitor to Verizon – say, Savvis, Rackspace or AT&T.

“The client may want our full support or just a helping hand,” said Bruce Biesecker, senior strategist at Verizon Business. “They may want design help or other resources. Or they may just want us to provide some training and then fade out into sunset gracefully.” more

FCC plans to turn over private data to aid broadband stimulus

The public has until Monday (Dec. 7) to comment on plans the FCC announced the day before Thanksgiving to release its vast database of private telecom services to the National Telecommunications and Information Administration for it to use in evaluating whether broadband stimulus proposals refer to so-called “unserved” and “underserved” areas. more

After Windstream buys Iowa, is Consolidated next?

What’s next for Windstream (NYSE:WIN)? As it announced its fourth acquisition in six months yesterday (its biggest buy yet, in fact), the company’s CEO, Jeff Gardner, maintained that, although he’d focus on execution and integration, he wasn’t done with M&A.

“A number of private companies could be opportunities for us in the future,” he told Connected Planet Tuesday. “There’s not a lot of public companies left out there, but there are a couple.”

A couple is right. In a note yesterday, Stifel Nicolaus analysts said Consolidated Communications (NASDAQ:CNSL) and Alaska Communications (NASDAQ:ALSK) are about the only publicly held acquisition targets Windstream has left. And given the unique integration challenges posed by Alaska’s geographic isolation, the analysts said, “We view Consolidated as the next, most logical potential target for Windstream.” more

Windstream acquires Iowa Telecom

Windstream (NYSE:WIN) is acquiring Iowa Telecom (NYSE:IWA), the company announced today, in its biggest acquisition since the initial merger that created the rural carrier in 2005.

Windstream’s $1.1-billion purchase comes just three weeks after its $643 million acquisition of another carrier, NuVox, and two weeks after it closed its acquisition of D&E Communications. Two months ago, the company acquired a small triple-play provider, Lexcom, for $141 million. more

Ciena outbids NSN in Nortel auction

Ciena (NASDAQ:CIEN) has outbid Nokia Siemens Networks (NYSE:NOK; NYSE:SI) to win the auction for Nortel Networks’ (OTC:NRTLQ) metro Ethernet and optical business unit.

Ciena agreed to pay about $769 million for the assets — $530 million in cash and $239 million in 6% senior convertible notes due 2017. It had originally bid about $521 million in cash and stock.

The Nortel unit reported $988 million in revenue for the first nine months of this year, down 21% from last year, and $377 million in gross profit (down 20% from 2008).


Ciena takes breather in Nortel auction, then raises bid, say reports

Ciena (NASDAQ:CIEN) called for a break in last Friday’s auction for Nortel Networks’ (OTC:NRTLQ) optical and Ethernet business unit, taking the bidding into a second day, Reuters reported Saturday.

UPDATE: On Sunday, Reuters reported — again, citing unnamed sources — that Ciena had raised its bid from about $522 million to about $714 million, a mix of $500 million in cash and $214 million in convertible notes.

It’s hard to imagine Ciena winning a bidding war against the other known participant: the much more well-heeled Nokia Siemens Networks (NYSE:NOK; NYSE:SI), which is reportedly bidding jointly with private equity firm One Equity Partners. But NSN has its own internal challenges — predicting larger than expected market share losses this year and announcing a new round of layoffs.

I wonder if Ciena would fare any better if it could pull its own private equity partner into this fight as well. What do you think? Leave a comment.

NSN bids on Nortel unit with private equity partner

Nokia Siemens Networks and private equity firm One Equity Partners have jointly bid for Nortel Networks’ (OTCBB:NRTLQ) Metro Ethernet business, challenging Ciena’s (NASDAQ:CIEN) bid for those assets in advance of an auction to be held on Friday, Reuters is reporting.

NSN was expected to bid on the assets, which include Nortel’s optical gear, but NSN’s own current reorganization efforts complicated the picture. A joint bid with a partner could give it enough financial backing to overcome that complication, however.

Analysts have predicted that NSN would be able to beat much-smaller Ciena in a bidding war, not just because of its greater capitalization but because it would exact more synergies from such a deal that Ciena would, allowing it to pay a higher price. Ciena offered $521 million in cash and stock, which was originally estimated as slightly less than half of the 2009 revenue from Nortel’s Metro Ethernet unit. But its revenues dropped about 26% from a year earlier in the third quarter.

NSN was outbid for Nortel’s wireless assets this year by rival Ericsson.

TW Telecom rides public fiber; more to come

TW Telecom (NASDAQ:TWTC) has signed an agreement to use the public wholesale fiber network being constructed in Ontario County, New York, joining Verizon Wireless as another customer of the five-city, 180-mile, 144-strand fiberoptic network that local government officials hope to complete early next year.

Ontario County’s network is being built without the aid of federal broadband stimulus financing. Much of the funding for the $7.5-million project – begun in late 2005 — was made possible thanks to a natural gas company, Empire State Pipeline, whose pipeline goes through the area.

But as federal stimulus funds pour into public/private wholesale middle-mile projects across the country, service providers like TW Telecom that are used to building out their own fiber may be able to expand their reach into areas that were previously economically prohibitive.

CenturyLink challenges NC broadband stimulus bid

CenturyLink (NYSE:CTL) is challenging a $3-million application for federal broadband stimulus funds filed in rural North Carolina by a local firm, Electronic Solutions.

The firm has proposed setting up 27 antennas to serve nearly all of North Carolina’s Person County. CenturyLink has responded by arguing that the areas targeted in that application are not unserved or underserved and that CenturyLink’s “affiliates” currently offer broadband there.

Randy King, who wrote the Electronic Solutions application, called CenturyLink’s challenge “a slap in the face.”

Challenges from incumbent providers of this type are sure to increase in coming weeks.


February 2015
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