A Big Deal in the Works?

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

A Big Deal in the Works?

The rumors are swirling about a couple of big deals in the works. I think many folks would like to see Comcast buy T-Mobile.

I don't think anyone wants to buy Sprint, whose wireline - the old Pin Drop fiber Network - is only bringing in $581 million in revenue these days. That won't help offset the $33.8 Billion in debt that is hanging over them.

There is often talk about who Level3 is going to buy next. As a channel partner of Level3, I hope they forego acquisitions for another year. They have some positive movement in the TWT integration going on, good people in place - don't mess with it! They even have some interesting products like Managed SfB. Go Organic!

The cable space has quite a bit of M&A in the works with the TWC-Charter-BrightHouse deal still waiting FCC and other state approvals; Altice is buying SuddenLink and Cablevision; and folks are waiting for ABRY to dump RCN and someone to scoop up WOW!. All about scale and grown no matter what, right?

It seems all the rumors are around Comcast, Zayo, Level3 and T-Mobile. It leaves out the rest of the CLEC market - namely, EarthLink, XO, Integra, Birch. I put Windstream and CenturyLink in the CLEC puddle because while they are mainly RLECs, it isn't what they are known for.

Birch is already working on moving to Canada with their acquisition of Primus Telecom. Maybe they don't like the Presidential candidates any more than I do?! Zayo also made a Canadian buy - Allstream.

EarthLink sold off its IT business to Synoptic for $29 million. ELNK gets a small amount of cash but looses about 100 talented employees. I guess EarthLink is staying focused on the Retail space.

While there were rumors about VZ selling off the old MCI assets currently named VZB, the CFO said that was not the case. The Terremark data centers are on the auction block according to reports, but no word yet on any firm sale. But rumor is abound about Verizon buying XO, mainly for its wireless spectrum.

"XO is the largest owner of LMDS spectrum, currently [2007] worth $35.8 million, in the nation. NextLink, the wireless operation of XOHO, recently launched its broadband wireless services in Las Vegas and increased its wireless portfolio to 14 markets at the speed of covering 1 to 2 metro areas/month: Washington DC, Boston, Atlanta, Tampa, Miami, Nashville, Chicago, Kansas City, Dallas/Ft. Worth, Houston, LA, Seattle, Phoenix, Las Vegas - already more than its almost only competitor in LMDS fixed wireless services, FiberTower. The remaining large LMDS spectrum owner, Level 3, through its acquisition of Telecove." [seekingalpha] IDT also owned a chunk of this spectrum too.

LMDS operates between 28 GHz and 32 GHz and falls in the microwave sector of spectrum. For 5G cell service, the FCC may be approving this band soon. If VZ can pick up XO for $2B, that is far cheaper than buying spectrum. It would have spectrum in 15 metros to trial 5G with.

Spectrum is the new beach front property.

This makes Level3, FiberTower and IDT worth a little more.

XO's long haul network consists of a good amount of IRU on Level3's network, which would be a hiccup for someone buying them for their network instead of for the customers and the spectrum.

We should see by March if this is a go or not!



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