Cable Technology Feature Article
Experts Predict More M&A Activity among Fiber Optic Network Operators
By Patrick Barnard, Senior Web Editor, TMCnet
In an article in the Denver Post, Buddy Miller, vice chairman of fiber optic network operator Level 3, said the telecommunications industry is ripe for further consolidation.
'We believe that further consolidation is probable, and we plan to be an active participant,' Miller was quoted as saying in the report. 'To put it simply, we believe that a dollar of revenue added to our network from a merger is worth more than on the other company's stand-alone network.'
In the article, telecom analyst Donna Jaegers says Level 3 is a likely candidate for a merger. She said it is unlikely it would be acquired, since the company has so much debt, but it could easily merge with another network operator, such as Global Crossing (News - Alert).
As the article points out, Level 3 has about $6.5 billion in debt, while Global Crossing has $1.3 billion.
John Legere, chief executive for Global Crossing, reportedly told the Star-Ledger newspaper in New Jersey that he is betting on "consolidation taking place, and we will be either an acquirer or a participant."
Yet another network operator mentioned in the article is XO communications. All three network operators have grown both through acquisitions and organically during the past five years. Global Crossing spent more than $400 million on two acquisitions in 2006 and 2007 and Level 3 spent roughly $4 billion on eight acquisitions from late 2005 to mid-2007.
If those three networks were merged into one it would create one of the largest (if not the largest) fiber optic networks in the world.
Patrick Barnard is a senior Web editor for TMCnet, covering call and contact center technologies. He also compiles and regularly contributes to TMCnet e-Newsletters in the areas of robotics, IT, M2M, OCS and customer interaction solutions. To read more of Patrick's articles, please visit his columnist page.
Edited by Patrick Barnard