EarthLink Wins One

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

EarthLink Wins One

nen-eln_logo.pngIt looks like EarthLink won the auction for ONE Communications, the CLEC with a HQ in New England and network in Mid-Atlantic, Midwest and New England. EarthLink will pay $370M for ONE including $285M of debt.

EarthLink Business will end up as the combined operations and network of New Edge Networks, Deltacom and ONE.

This acquisition is good for EarthLink because there isn't that much overlap. Deltacom gave them the Southeast; ONE gives them the Northeast.

I see this combo being good for The Channel because One has a decent Agent program that is basically underutilized since the CLEC had little marketing prowess. One was a combination of 3 smaller CLEC's  Choice One, Coversant and CTC that couldn't put it together. Not much of a brand. Mainly a T1 shop despite having fiber assets. And financially it has been struggling for a while, which explains the long term rumors that One was for sale. Maybe EarthLink management can pull some cost cutting magic to turn a profit.

One thing to consider: the management of many CLEC's - Deltacom, ONE and even CavTel (that PAETEC bought) and Nuvox - have not been able to market their companies; deliver innovative services to the market; or sell high margin services. It's been mainly a T1 sold on price game. So I will be curious how these mergers change that. (Nuvox is now Windstream Business selling Hosted PBX, so some changes are being made).

The name change to EarthLink Business gives this new entity a perfect opportunity to launch a marketing campaign to brand the new company to the business marketplace and The Channel IF they can deliver a value proposition.

Final note: Like Deltacom, ONE Comm. is a Metaswitch shop. That will make network integration a little easier.



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