Merger Noise in June

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

Merger Noise in June

BroadSoft gobbled up mPortal, which "designs and develops customer experiences across mobile, web and other connected devices." [Marketing noise for app and portal.] It turns out that BroadSoft Design is actually mPortal. It has something to do with BroadSoft's UC-One.

The IOCs and RLECs are in the midst of a tempest due to USF Reform and other legislative changes taking place. A consortium of (unnamed) Independent telcos bought Codero. Why? In a word: cloud. In lots of words from the website: "Robust, high-speed, technically advanced networks and access to cutting-edge IT services are critical to maintaining employment, supporting economic development, and sustaining the vitality of rural and small markets. The telecom and broadband providers that serve smaller markets must continually invest in new technologies and capabilities to address the rapidly changing needs of their customers. The Codero transaction is about marrying the impressive technical, product development and sales resources of Codero with the collective resources and established market presence of the investor telecoms, creating a scalable vehicle for the development and delivery of customized hosting and IT products and services." RLECs and IOCs need to start selling more than landlines. Hosted Voice and cloud services to businesses -- even if there are only a couple of hundred businesses -- has to make up for the decline in residential services.

Cloud and hosting companies are so hot that Liquid Web received an investment from Madison Dearborn Partners, a brand name private equity firm based in Chicago, IL. Liquid Web is in hosting, VPS, and cloud with 30K customers globally.

I missed the Datapipe / GoGrid deal that happened in January. Sorry.

The big rumor is that Altice, a French telecom company, buying MSO Suddenlink is also looking to buy the remaining wireline assets of Verizon. "Altice has spent $7.9 billion for acquiring 70% stake in the seventh largest US cable TV company, Suddenlink Communications," the article explains. And now it is eyeballing the remaining FiOS assets.

Two New England telecom firms merged - Oxford Networks and BayRing Communications. The way the PR reads, I smell IPO next year. "The combined entity will be the largest competitive telecommunications provider headquartered in Northern New England. The new organization will operate approximately 2,000 route miles of high-capacity fiber optic network providing access to nearly 50,000 commercial buildings, four robust SOC 2 (Service Organization Control) data centers, and direct access to all other major hub data centers throughout Maine, New Hampshire and Massachusetts. These 2 mainly compete against Fairpoint and the cablecos in New England. If you have you stuff together, it isn't even a fair fight.

8x8 grabbed another company. 8x8 announced the company has agreed to purchase certain assets of privately-held Quality Software Corporation (QSC), a software QA and analytics firm for $3 million in cash and $1.3 million in stock compensation. "QSC is one of the newest, most innovative players in the call center performance and analytics marketplace based in Delray Beach, Florida with a development center in Romania." [source]

Last rumor is T-Mobile and DISH. "Possible Dish/T-Mobile merger could be trouble for AT&T and Verizon. T-Mobile's problem is spectrum--Dish owns a ton of spectrum and hasn't used it." Here's what is wrong with that statement: T-Mobile has spectrum. It got some more as part of the deal break-up with AT&T. It hasn't been aggressive in spectrum auctions. It hasn't deployed all the spectrum it owns either.

[See spectrumgateway, a 2006 auction view and finally this article.]

DISH has some crappy spectrum, along with 40 MHz of nationwide AWS spectrum . They bought AWS-3 spectrum as DE Holdings, but they have spectrum that is terrestrial satellite with an FCC dispensation. The clock is ticking on DISH actually deploying the spectrum. At the end of 2013, DISH was in fixed wireless/TD-LTE trials with nTelos in rural Virginia. In Texas, Sprint was in a similar trial with DISH. The problem is twofold: deploying the radios and spectrum costs real dollars and lots of labor, including filling in the coverage gaps and doing it in the FCC mandated time frame. Hardly any of the Top 4 Cellcos have a spectrum issue; they have a cash-deployment issue. Luckily, the FCC is soft on enforcement of mandates and auction specs.

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