Are Windstream and CenturyLink reading from the same script?
CenturyTel built up a wireline base from Embarq, Verizon (2001-2002), and Madison River. In 2003 to 2005, C-Tel bought fiber networks - Digital Teleport (which became LightCore), MFON and KMC. Then in 2010 announced it was buying Qwest - federal government contracts, fiber, international, data centers and more wireline. Then it went Cloud by buying Savvis. This creates an $18B telco with 190K route-mile fiber network and only 45K employees. (Oh, the layoffs!)
At the same time, Windstream has a colorful history. In 2005, Alltel spun off its wireline business (from its cellular assets) to form Windstream. It was a combination of Alltel and VALOR. VALOR Telecom being an Alltel company formed from GTE assets that Alltel purchased in 2002 in the wake of GTE and Bell Atlantic merging to become Verizon. In 2007, Windstream bought a rural ILEC called CTC in NC. Then it bought Lexcom and D&E in 2009. 2010 was a banner year with Windstream buying Iowa Telecom (ILEC), Nuvox (CLEC), KDL (fiber), and Hosted Solutions (cloud). Today, WIND bought PAETEC, a collage of VAR, Energy, Hardware, fiber, telco and CLEC.
- Both ILEC's bought Cloud companies.
- Both bought CLEC's with a big Channel presence.
- Both grabbed fiber assets.
- Both (plus Fairpoint, Frontier) acquired GTE or VZ wireline assets.
- Both think that national business accounts, especially federal government, will be the growth stage since the ILEC wireline division is the diminishing asset.
In a lot of ways, EarthLink is similar to both these companies. Riding out its cash cow of dial-up, which is a diminishing asset, it bought STS, New Edge Networks, ITC Deltacom and ONE Comm. Hosted/Cloud, CLEC and fiber. That must be the new playbook.
If Frontier and Fairpoint did have problems with their Verizon purchases, they might be following the same playbook. Maybe they will.