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US Wireline Services Industry Going All In on Consolidation
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The U.S. wireline telecom industry has been witnessing a surge in consolidation among major players due to an intensely competitive environment. Several mergers and acquisitions (M&A) have been taking place over the last couple of years. In the past decade, U.S. wireline phone companies have lost a significant number of customers to wireless service providers and cable multi-service operators.
In order to tackle this critical situation, the wireline operators have decided to merge in order to attain economies of scale with respect to fiber optic cable networking and cloud-based network services. Meanwhile, small and medium business (SMB) services have become a high revenue generating segment in the data communications industry.
Fiber optic cable network is a vital infrastructure to meet the surging need for cloud-based business data, along with more video streaming services by individuals. Moreover, fiber-optic cable network is vital for backhaul and last mile local loop, which are needed by the wireless service providers for their upcoming 5G network.
Yesterday, Cincinnati Bell Inc. announced that it will buy Hawaiian Telcom Inc. for $650 million and OnX Enterprise Solutions for $201 million. The company took the step to expand its network and enterprise IT services. The combined entity will have 14,000 route miles of fiber and access to an undersea cable connecting Asia.
Cincinnati Bell expects for the OnX transaction to close in the fourth quarter of 2017, while the Hawaiian Telcom transaction will close in the second half of 2018. The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In Feb 2017, telecommunications and data service firm Windstream Holdings, Inc. acquired EarthLink Holdings Corp. The deal will witness the incorporation of 29,000 fiber optic route miles from EarthLink, 16,000 of which will expand Windstream’s footprint. This will bring the total to 145,000 route miles of fiber optic. EarthLink Holdings will also bolster Windstream’s SD-WAN (software-defined wide area network) suite.
In addition, on Apr 2017, Windstream entered into a $228 million deal to acquire Broadview Networks, a leading provider of cloud-based unified communications solutions to SMBs. The company expects the acquisition to close in the third quarter of 2017 subject to necessary regulatory clearances.
In Nov 2016, CenturyLink Inc. and Level 3 Communications Inc. entered into a definitive agreement, through which, the former will acquire the latter in a cash and stock transaction. The total deal size is approximately $34 billion including debt. The equity value of this deal is approximately $25 billion. The deal is anticipated to close in the third quarter of 2017, subject to customary regulatory approvals.
If the proposed merger finally materializes, it will increase CenturyLink's network by 200,000 route miles of fiber including 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents. The company’s on-net buildings are expected to increase by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA (Europe, the Middle East and Africa) and Latin America. Therefore, a merged CenturyLink and Level 3 Communications will become a formidable challenger to their large counterparts.
In Apr 2016, Frontier Communications Corp. completed the purchase of Verizon Communications Inc.’s (VZ - Free Report) wireline assets worth $10.5 billion in California, Florida and Texas. Currently, the company operates landline business and provides broadband, video, voice and FiOS services in all the three states. Notably, half of the network runs on high-quality fiber-to-the-home (FTTH) technology. Frontier Communications will be able to use them as part of its service expansion drive and leverage the same to provide off-net capabilities to its customers.
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US Wireline Services Industry Going All In on Consolidation
The U.S. wireline telecom industry has been witnessing a surge in consolidation among major players due to an intensely competitive environment. Several mergers and acquisitions (M&A) have been taking place over the last couple of years. In the past decade, U.S. wireline phone companies have lost a significant number of customers to wireless service providers and cable multi-service operators.
In order to tackle this critical situation, the wireline operators have decided to merge in order to attain economies of scale with respect to fiber optic cable networking and cloud-based network services. Meanwhile, small and medium business (SMB) services have become a high revenue generating segment in the data communications industry.
Fiber optic cable network is a vital infrastructure to meet the surging need for cloud-based business data, along with more video streaming services by individuals. Moreover, fiber-optic cable network is vital for backhaul and last mile local loop, which are needed by the wireless service providers for their upcoming 5G network.
Yesterday, Cincinnati Bell Inc. announced that it will buy Hawaiian Telcom Inc. for $650 million and OnX Enterprise Solutions for $201 million. The company took the step to expand its network and enterprise IT services. The combined entity will have 14,000 route miles of fiber and access to an undersea cable connecting Asia.
Cincinnati Bell expects for the OnX transaction to close in the fourth quarter of 2017, while the Hawaiian Telcom transaction will close in the second half of 2018. The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In Feb 2017, telecommunications and data service firm Windstream Holdings, Inc. acquired EarthLink Holdings Corp. The deal will witness the incorporation of 29,000 fiber optic route miles from EarthLink, 16,000 of which will expand Windstream’s footprint. This will bring the total to 145,000 route miles of fiber optic. EarthLink Holdings will also bolster Windstream’s SD-WAN (software-defined wide area network) suite.
In addition, on Apr 2017, Windstream entered into a $228 million deal to acquire Broadview Networks, a leading provider of cloud-based unified communications solutions to SMBs. The company expects the acquisition to close in the third quarter of 2017 subject to necessary regulatory clearances.
In Nov 2016, CenturyLink Inc. and Level 3 Communications Inc. entered into a definitive agreement, through which, the former will acquire the latter in a cash and stock transaction. The total deal size is approximately $34 billion including debt. The equity value of this deal is approximately $25 billion. The deal is anticipated to close in the third quarter of 2017, subject to customary regulatory approvals.
If the proposed merger finally materializes, it will increase CenturyLink's network by 200,000 route miles of fiber including 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents. The company’s on-net buildings are expected to increase by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA (Europe, the Middle East and Africa) and Latin America. Therefore, a merged CenturyLink and Level 3 Communications will become a formidable challenger to their large counterparts.
In Apr 2016, Frontier Communications Corp. completed the purchase of Verizon Communications Inc.’s (VZ - Free Report) wireline assets worth $10.5 billion in California, Florida and Texas. Currently, the company operates landline business and provides broadband, video, voice and FiOS services in all the three states. Notably, half of the network runs on high-quality fiber-to-the-home (FTTH) technology. Frontier Communications will be able to use them as part of its service expansion drive and leverage the same to provide off-net capabilities to its customers.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>