Regional independent telco Otelco announced the acquisition of Reliable Networks, a Maine based provider of cloud and managed services in New England. Otelco is a wireline based service provider with operations in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. They recently emerged from bankruptcy and see the movement into IT and cloud services as a natural progression for the restructured company.
Otelco is following a script being played out in telecom, where service providers large and small are rapidly building cloud/IT and managed services capabilities, either through acquisition, partnership, or internal focus. “If you look at telecom in general, it seems to be the direction that most companies are headed,” said Otelco CFO Curtis Garner in an interview. Otelco has made nine or ten acquisitions since its inception, but this is “…probably our first in the cloud services and IT area,” said Garner.
Reliable Networks of Maine LLC provides technology consulting, managed services and cloud hosting services to business clients across the U.S. Otelco sees great promise with Reliable’s existing customer base. “We will be able to offer our existing Hosted IP PBX service to their customers and we can offer their cloud based services to our customers,” said Garner. Otelco has been offering hosted IP PBX for about three years according to Garner.
Garner would not reveal the full financial transaction details for Reliable, but there was an initial $500K payment, with the “…balance of the purchase price to be paid in stock over the next three years, contingent on Reliable Networks achieving certain financial objectives.” Reliable will join Otelco’s New England based OTT Communications and will maintain their brand for the time being.