The consolidation trend continues in telecom, touching all corners of the business, including service providers, equipment vendors and consultants. Much of the consolidation attention focuses on service providers with Frontier’s recent acquisition of Verizon rural assets the latest closed deal. Service provider deal attention now shifts to CenturyLink’s pending deal for Qwest. But consolidation is not just the domain of service providers.
Pace, a U.K. based set-top-box manufacturer just announced a $475 million deal to acquire 2Wire, a leading provider of broadband modems and gateways. Pace sees 2Wire as a great channel into the U.S. broadband carrier market, especially AT&T, 2Wire’s largest customer. Other recent deals of note include Nokia Siemens Networks $1.2 billion deal for Motorola’s wireless infrastructure business and magicJack parent YMAX’s merger with VocalTec.
Consolidation is not only happening with larger vendors and carriers. M&A activity is also present in the tier 2 and 3 telco space as well. Finley Engineering, a large consulting engineering firm with interests in both telecom and utilities, recently announced the acquisition of Communications Engineers Inc of Springfield, Ill. “This strategic acquisition will increase Finley Engineering’s presence in Illinois and the surrounding area, and complement our established presence in the communications industry,” explains Rod Christenson, President and CEO of Finley Engineering. This latest Finley acquisition follows their recent purchase of Bryant Surveying & Mapping of Missouri.
Among smaller carriers, recent M&A deals include NTELOS buying the FiberNet assets of One Communications, expanding their regional fiber network across the mid-Atlantic region. I expect the M&A activity to continue, as tier 2 and 3 carriers look to build scale and efficiencies, and their respective vendors and suppliers look to grow with them.