Mergers & Acquisitions
The most recent announcement that Zayo is acquiring Electric Lightwave/Integra is one of four major telecom mergers of 2016. This one may have particular interest to SMB customers that have found themselves as a market segment that carriers are abandoning more and more for “larger fish.” Zayo is a big national fiber provider and this merger will ultimately mean a larger network for both Zayo and Electric Lightwave customers. These things happen very slowly. I do not expect any changes to be at all visible for at least a year. The first will be a branding change in a year; the merging of the networks will come after that. Then, back office personnel will undergo major changes. And eventually Zayo will begin consolidation of call centers and operations to reduce costs and overlap of the two organizations.
2016 Mergers So Far:
November 30, 2016 Zayo Buys Electric Lightwave Zayo – Zayo is buying Electric Lightwave of Vancouver, Washington. Electric Lightwave was once a division of Integra Telecom Holdings Inc. In August, Integra had just rebranded to the Electric Lightwave name.
November 17, 2016 Verizon Buys XO – Verizon, the No. 1 U.S. wireless service provider, said in February that the deal to buy XO Communications would include XO’s fiber-based Internet protocol and Ethernet networks. Those help serve its enterprise and wholesale customers.
November 7, 2016 Windstream Buys EarthLink – Windstream Holdings Inc and EarthLink Holdings Corp have announced a $673 million all-stock deal that will bring the two companies together. The all-stock deal is expected to close in the first half of 2017.
October 31, 2016 CenturyLink Buys Level 3 – Telecommunications company CenturyLink said it would buy Level 3 Communications in a cash-and-stock deal with an equity value of about $24 billion to expand its fiber optic network and high-speed data services for business clients.
All these companies have struggled with new customer acquisition and flat revenue. What integration challenges will exist in 2017 and 2018? Combined companies typically layoff staff, and CenturyLink has already announced 3,000 staff to be cut.
This will likely create an even larger chasm between the Electric Lightwave fiber offerings, which they have been aggressively promoting over the past year. Next will be the lower end Integra T1 and dial tone customers that they have been actively trying to grow above $1,000 per month. There are uncertainties of support for the SMB customer that bills under 1K a month as Zayo has focused, almost exclusively, on fiber customers.
Access Tech manages this with carriers several times a year. We will be your constant for any changes that happen. Please feel free to call us if you have any questions.