The past year has been one of heavy consolidation for US-based competitive local exchange carriers (CLECs), but underlying the need to gain scale through acquisition are a few other prominent trends, according to industry experts.
Things motivating CLECs to consolidate include the need to add more fiber infrastructure, the desire to move to cloud-based and data center services, and, of course, the improved economic picture, which is making a lot of this possible. Also, experts note, CLECs and independent incumbent service providers such as CenturyLink Inc. (NYSE: CTL) and Windstream Communications Inc. (Nasdaq: WIN), are increasingly looking to serve larger enterprises, and not just the small and mid-sized market.
Here's a breakdown of those trends and how they are playing out:
spc_markl, User Rank: Light Beer 12/5/2012 | 4:15:33 PM
re: What's Fueling the CLEC Buying Binge?
The classic CLEC model was flawed from the start. By definition, the small number of these carriers that have survived are well-managed. However, the main reason for the Paetecs needing to keep acquiring companies is in order to keep their revenues up.
Dickoz, User Rank: Light Beer 12/5/2012 | 4:15:19 PM
re: What's Fueling the CLEC Buying Binge?
CLEC's are a breeding ground for acquisition. As the economy warms up, I beleive that we can expect a consolidation of service providers so that only 2 or 3 big names remain. I'll let you guess who they are :-)
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