As reported in Phone + Magazine, PAETEC and EarthLink Inc. both are rumored to want to buy CLEC One Communications Corp., which put itself up for sale in September.
Reuters reports, though, that EarthLink is officially in the running. Bids for the Massachusetts-based One were due yesterday and pricing could fall between $500 million and $1 billion. The news service quoted anonymous sources not authorized to speak on behalf of the companies involved.
About three months ago, One Communications put itself up for sale as it risked breaching debt covenants. Since that time, PAETEC has been considered a leading contender for the rival CLEC; the purchase would expand PAETEC’s reach in the northeastern United States, although PAETEC wouldn’t get much in the way of fiber assets. One Communications just sold those holdings to NTELOS.
A One Communications takeover also makes sense for EarthLink. As the dial-up ISP distances itself from a dying business model, another CLEC purchase would form a solid strategy, Current Analysis research director Brian Washburn said. If EarthLink combined its New Edge Networks and DeltaCom businesses with another competitive provider’s resources, the resulting company starts to look like “a very large, super-regional CLEC."
One Communications formed in 2006 after three CLECs merged. But earlier this fall, the economy, debt and other problems pushed the CLEC to hire private equity firm Blackstone Group LP to explore “strategic alternatives" that could include M&A.
One Communications could not comment on the reported sale plans.
About Telecoworks
- Valerie Brauckman Burgess
- I was recruited by Bell Atlantic (now Verizon) almost twenty years ago as General Manager of its Video Dial Tone rollout. VDT deployment was the forerunner of Verizon's FiOS and delivered television programming over fiber via the public switched network. Since that time, I have become a local voice and data expert specializing in VOIP, SIP and switched Ethernet deployments. After leaving Verizon, I was hired as AT&T's East Coast Global Business Development Manager responsible for selling and deploying local voice services to AT&T's long distance and data Enterprise customers. After leaving AT&T,I managed several CLEC's indirect sales channel before launching my business in 2001. TelecoWorks is an independent telecom consulting firm representing all of the major telecom carriers in the marketplace today. Geared to successfully support businesses navigating new voice and data technologies, TelecoWorks' goal is to improve a company's connectivity, enhance their business processes, and ultimately save them money.