Rural Acquisitions Happen Too

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

Rural Acquisitions Happen Too

What if you were a company that long ago was created to be a volume buying group for RLECs and owned by a bunch of IOCs? Then time passes and long distance minutes are declining. The FCC mandates that even RLECs have to transition from TDM to IP for voice. Oh, and that RLEC funding through the Universal Service fund was going to transition from voice lines to broadband lines. RLECs would be in a panic and start to sell/merge.

And this has been happening. Pretty often actually. Shenandoah Telecom just finished acquiring NTELOS Holdings Corp. This is just one example.

But back to the holding company for LD volume buying (HoldingCo), it talks the Board into investing in Broadsoft infrastructure to start white-labeling Hosted PBX for its members in October of 2013. Sonus gear is used as well.

Now, two and on-half years later, it has churned through personnel, the C-Suite, business plans and cash. About 100 companies jumped on to be partners. Apparently, that wasn't nearly enough to keep everyone happy.

A source confirmed that this company was acquired by Onvoy today. That seems weird except for the VoIP Orig/Term business. ["In 2003, the ANPI system exceeded one billion minutes of usage per year," according to website.] What does Onvoy do with the Sonus and Broadsoft infrastructure? And the 100 partners? I would sell them to either CoreDial or VoIP Logic. Unless Onvoy is going to get into the Broadsoft white-label game -- to compete against 620 global carriers offering Broadsoft, many of whom are clients of Onvoy now.

Onvoy already acquired Broadvox, Vitelity and Layered Comms to become the third largest CLEC in the US. And earlier this year, a PE firm bought out Onvoy. [GTCR also owned Zayo Group before it went public.] PE likes growth. Easiest path to growth is to buy.

GTCR also is invested in Rural Broadband Investments,which acquires and invests in rural-focused cable systems serving residential and commercial customers in small- to middle-sized markets and rural geographies. [website] There is a fit there.

HoldingCo still has minutes - and 100 partners - so there is some money to be made here, but not from the insignificant number of seats of hosted PBX. Also, there is something to be said for relationships in the RLEC/IOC community.

Confirmed that Onvoy has made an offer to buy ANPI. Waiting on ANPI ownership to approve* (see below).

Just another Broadsoft acquisition.

PLUS more M&A!

And a source told me that GoDaddy is getting into the HPBX space with a small acquisition! A little like what Intermedia.Net did years ago.

Just a month after GoDaddy unveils a possible competitor to Amazon's cloud computing business, its chief technology officer and executive vice president of its cloud computing business group, Elissa Murphy, has resigned - to go to Google!

Now GoDaddy is getting into the HPBX business. Buy an email address, a domain, a hosted seat....

Gary Kim writes that in 2015, UCaaS revenue grew 6% YoY yet seats sold grew 25%. That correlates to prices dropping.


Remember when ANPI bought Zone Telecom? In that transaction, ANPI, LLC and Zone Telecom, LLC created ANZ Communications LLC, which they both owned 50% of to continue tooperate the retail and wholesale operations of the combined company.

It is even more convoluted because owners of these Zone have holdings in Hong King and Bermuda. Per an SEC filing: "ANPI, LLC, ANPI Business, LLC and Zone USA, Inc. hereby notify the Commission of a pro forma transfer of control from e-Kong Group Limited, a Bermuda company that is publicly traded in Hong Kong, to an affiliated British Virgin Islands holding company, Distacom International Limited, under the common control of one of e-Kong's substantial shareholders at the time of the transaction. The transaction was consummated on January 22, 2015."

In addition, ANPI Holdings Inc. is a telecom company privately held by 140 RLECs (rural local exchange carriers also called IOCs, independent operating carriers), says Mike Cromwell, ANPI Chief Sales Officer, In March 2014, the org tried to raise $25M and managed to sell just $1.25M per this filing which is signed by the CFO of AMZ Comms for ANPI Holdings, Inc.

Yet ANPI does have an entity that is an IXC and CLEC. According to Bloomberg that is ANPI, LLC.

"ANPI, LLC, a facilities-based telecommunications provider, provides wholesale long distance, data, and carrier solutions to ILECs, CLECs, and wireless operators throughout the United States. Its solutions include private label hosted unified communications; point-to-point, managed IP and TDM dedicated circuits; SS7 signaling network and database services; tandem access services; dedicated Internet access; and back office tools for monitoring and analyzing traffic. The company was founded in 1996 and is based in Springfield, Illinois with regional offices in Mount Pleasant, Utah; and Cherry Hill, New Jersey. It has a network operations center and engineering lab in Frisco, Texas." Onvoy would get all of that to add to its arsenal. Will they move up to # 2 CLEC in size and scope?

Sometimes I really go down the rabbit hole.

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