Cox Communications’ plan to purchase multi-play and business services provider EasyTEL, announced yesterday, is an interesting move in that Cox already serves EasyTEL’s entire Tulsa service territory.
EasyTEL’s network was “attractive” to Cox, a Cox spokesman told Telecompetitor. “They have a very dense fiber network in our footprint and they are very focused on the mid-size business market so it was a nice fit and made a lot of sense for us,” the spokesman said.
According to the EasyTEL website, EasyTEL offers service of up to 1 Gbps including MetroLAN service. Asked how Cox would reconcile EasyTEL’s offerings with its own, the Cox spokesman said “They’ve been competing effectively in that market and their customers are very happy. We expect to continue to deliver the same level of service and will look for ways to integrate the best of both worlds.”
As for whether Cox would keep the EasyTEL brand, the spokesman said “our intention is to be one company” and that “we have to work through the details of how employees will be integrated and customers will be served.”
Cox’s plan to purchase EasyTEL is the latest example of consolidation in the pay TV and broadband industry, with both cable companies and telcos playing the role of consolidator. A few deals that come to mind include Cablevision’s 2010 purchase of cableco Bresnan Communications; Consolidated Communications purchase last year of SureWest, a company with cable and broadband assets; and the launch this year of BCI Broadband, a company formed specifically to acquire rural cable operators.
The consolidation trend seems to be the result of a couple of other trends.
On the negative side, smaller companies that offer pay TV are finding it increasingly difficult to compete in a market with skyrocketing content costs. When Frontier purchased Verizon’s FiOS business in several markets, for example, Frontier essentially phased out FiOS video, noting that its relatively small customer counts made it impossible to obtain competitive pricing on content.
On the positive side, network operators — particularly those that do not have a wireless business — increasingly are determining that the enterprise market is their best opportunity for growth. Consolidated, for example, said its purchase of SureWest was motivated by a desire to increase the company’s emphasis on the broadband and business markets.
Against this backdrop companies like EasyTEL that have advanced network infrastructure should continue to be attractive to consolidators seeking to get a leg-up in pursuing the business market.