It's the third considerable acquisition in just a month. Recently, Zayo announced that it is acquiring Electric Lightwave and its entities, including Integra. If you recall, a few months ago Integra just split into two companies from Electric Lightwave. Plus, earlier in November Windstream acquired Earthlink and CenturyLink acquired Level 3.
So why is are the companies merging? One BIG reason - Fiber.
According to CenturyLink, with the merger it will have access to one of the largest fiber routes in the world:
"This transaction increases CenturyLink's network by 200,000 route miles of fiber, which includes 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents. Accounting for those served by both companies, CenturyLink's on-net buildings are expected to increase by nearly 75 percent to approximately 75,000, including 10,000 buildings in EMEA and Latin America."
It's not enough to get the fiber routes, you need a team of software developers who know where the fiber is, where the splice points are located, and which buildings currently have the requisite edge gear. Some of the acquisitions may include strategies to acquire intellectual properties as well as physical goods.
For Windstream and Earthlink, the acquisition gives Windstream a larger network to provide SD-WAN and managed services such as UCaaS, cloud-compute, and security on a network they manage. While the press release doesn't focus on fiber, its map does (below). You can see the only listed item for Earthlink is its fiber routes.
The telecommunications industry's wave of major consolidations means the number of network providers are shrinking. The reason may be that the acquisitions provide the new company with more fiber routes. We predict that older technology that is TDM-based will be phased out as fiber replaces it, and it may occur rapidly as the acquisition deals become more frequent.
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