Merger, Acquisition Change Telecom

merger, acquisitionMerger, Acquisition Change Telecom in 2016

Merge,  acquisition changes dominated the telecom industry in 2016.   Several leading carriers launched merger, acquisition projects.  While some companies merged to create more competitive companies, others acquired competitors to stay afloat.  Most noteworthy, strategic M&A goals were launched to compete with disruptive threats and innovative challenges in telecom technology.

Most noteworthy, many large, incumbent carriers focused on merger and acquisition transactions to add missing strategic services.  They also merge to expand coverage or further define increased value for their customers. Merger, acquisition strategies are a great way to maintain relevant in the marketplace against competitors like Google, Comcast and Verizon wireless.

While some of the merger, acquisition deals still require regulatory approval, here is a summary of this year’s noteworthy merger, acquisition activities in telecom.

Verizon acquires XO Communications

On November 17, 2016, the U.S. Federal Communications Commission approved Verizon Communications Inc.’s $1.8 billion acquisition of Carl Icahn’s XO Communications fiber-optic business.

Verizon stated that they will use Herndon, Va. based XO Communications’ fiber-based IP and Ethernet network assets to better serve its enterprise and wholesale customers.   XO’s fiber business will bolster Verizon’s cell network.

Verizon will also be leasing XO’s available wireless spectrum.

Windstream, EarthLink Merger

Windstream and EarthLink announced merger plans to create a joint company on November 8, 2016.

So Windstream announced that it would purchase fellow U.S. telecommunications company EarthLink an all-stock deal valued at about $1.1 billion.  This includes EarthLink’s debt.

EarthLink shareholders will receive 0.818 Windstream shares for each share they own.
Windstream shareholders will own about 51 percent of the combined company when the deal closes, while EarthLink shareholders will own about 49 percent, the companies said.

Most noteworthy, the new entity will join forces to create a large, national footprint that may well compete with telecom giants Verizon and AT&T.  Windstream and EarthLink expect the deal to close during the first half of 2017.

CenturyLink Acquisition of Level 3

On October 31, 2016, CenturyLink and Level 3 Communications, Inc. announced that their Boards of Directors unanimously approved a definitive merger, acquisition agreement between the two telecom giants. CenturyLink will acquire Level 3 in a cash and stock transaction valued at approximately $34 billion, including the assumption of debt.

Level 3 shareholders will receive $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share they own.  This implies a purchase price of $66.50 per Level 3 share (based on a CenturyLink $28.00 per share reference price) and a premium of approximately 42 percent based on Level 3’s unaffected closing share price of $46.92 on October 26, 2016.  October 26, 2016 was the last trading day prior to market speculation about a potential transaction. Upon the closing of the transaction,

CenturyLink shareholders will own approximately 51 percent and Level 3 shareholders will own approximately 49 percent of the combined company.

The combined company will have 500,000 route miles of fiber.  It will form the second largest domestic communications provider serving business customers behind AT&T.
CenturyLink, based in Monroe, La announced that the new company can earn 76 percent of its revenue from business customers.

Charter-Time Warner Cable Merger,  Acquisition Approved by FCC and the Department of Justice

Charter Communications received approval of their merger, acquisition of Time Warner Cable in a $78 billion transaction by the U.S. Department of Justice and the FCC in April 2016. Charter and Time Warner Cable merger,  acquisition,  therefore has formed one of the largest service providers in the country.

Approval of the deal came with some conditions, however. The regulatory bodies said that Charter can’t limit access to streaming video providers by putting contractual restrictions on them, which could limit content distribution. Consequently, Charter is prohibited from using data caps or charging consumers more for using more data.
Especially relevant, the Department of Justice also approved Stamford, Conn.-based Charter’s related $10.4 billion acquisition of Bright House Networks.

Comcast Announces Wireless Service

On Sep 20, 2016 Comcast announced it is looking to enter new territory by offering its own wireless service by mid-2017.

This news materialized during a speech by Comcast’s CEO Brian Roberts at a Goldman Sachs Conference. Roberts said the new service would use Verizon’s existing wireless infrastructure combined with Comcast’s own 15 million Wi-Fi hotspots.  The Wall Street Journal announced the news in September.
Cable giant Comcast in September confirmed that it was launching a wireless service following months of industry rumblings about a new mobility business unit within the company.

The new wireless service will use leased airwaves from competing carrier Verizon Wireless, as well as Comcast’s own network of 15 million Wi-Fi hot spots. The service will help Comcast compete with fellow carriers that already have a mobility practice, will add a new revenue stream for the provider, Comcast said.

Most of all, Comcast further said that the wireless service will be officially launched by mid-2017.

Verizon Makes Bid for Yahoo Acquisition; Yahoo Confirms Large-Scale Breach

Verizon confirmed a future acquisition of Yahoo’s operational assets, including its media, search, and communications assets, for $4.83 billion.  Yahoo formally confirmed to its Basking Ridge, N.J.-based buyer.

In addition, in September, Yahoo disclosed that more than 500 million of its user accounts were hacked in 2014.  At the time, Verizon said it would evaluate the deal as more information became known.

Verizon publically defended the deal as of October, but in November, Yahoo told its investors that Verizon could still potentially back out of the acquisition as a result of the breach.

On December 1, 2016 Barrons.com reported that Verizon management sees the deal going through.  Most of all, the price, however, could be renegotiated or delayed but the deal remains important to Verizon’s digital media

 

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CenturyLink Joins Forces with Level 3

SIP Services – Update on CenturyLink Level 3 Acquisition

 sip services

Century Link revealed plans to purchase Level 3 in late October for $34 billion.   Together, the two companies will offer a combination of cloud and data services (including SIP) for businesses over a wide-reaching, high speed network.

According to Telecompeitor.com, “If CenturyLink’s plan to merge with Level 3 Communications is approved, the combined carrier will get 76% of its revenue from the enterprise and wholesale market, said a Level 3 executive today.  After the CenturyLink, Level 3 merger, the combined company would be the most heavily business-focused of the nation’s five largest service providers by a long shot…”

READ the full Telecompeitor story on the acquisition.

SIP Services by Level 3

We highly recommend Level 3 SIP services to our customers.  Caleidoscope has many years of working with Level 3.  Our experience with Level 3 SIP  is excellent.

Especially relevant, Caleidoscope Solutions is an  authorized broker of Level 3 SIPservices.  Therefore, our numerous years of experience deploying SIP services for our customers provides us with a unique perspective.  Our years of experience as brokers offer you our expert opinion on multiple SIP carrier options.  We say “All SIP services are not created equal”.  Level 3 SIP services are compelling.   Consequently, at CaleidoscopeSolutions, we often reference Level 3 as “the carrier’s carrier”.  Most noteworthy,  Caleidoscope is authorized to  represent Level 3 since 2007.

You Can Realize the Benefits of Level 3 SIP

Streamline operations when you use Level 3 Voice Complete. –  As a result, SIP can eliminate patchwork voice services from disparate vendors and reduces vendor management complexities.

Create both Secure and Survivable SIP services – Furthermore, you deploy Enterprise-grade business continuity and disaster recovery.  This helps keep your business up and running in times of crises.

Build Solid Emergency 911 Solutions: –   You assure employee safety when you obtain comprehensive 911 emergency service.

Secure an Expansive Footprint –  simplify migration and eliminate the need for multiple vendors when you deploy Level 3 SIP.

Realize Cost Savings – As much as 30-50 percent cost savings  can be achieved by deploying SIP versus legacy circuit-switched infrastructures.

Level 3 Voice Complete includes the following – It is True, Native ISDN PRI Handoff.   Connect all business sites without costly upgrades or need for IADs or gateways.

Level 3 has its own SIP Network – As a result, Level 3 SIP provides a predictable, high-quality user experience.   Furthermore, you can provision Geographically Independent Phone Numbers.  The network design simplifies number management across mobile workforces.  Hence, it provides virtual presence.

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SIP Services

Call Caleidoscope at 866.462-9259 to learn more about Level 3 SIP services.

Also, click the hot link on our site and  you can learn more about Level 3.   Or click on our dedicated SIP web page to read more about SIP services.

 

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Network-Based Security Options

Network-Based Security OptionsSecurity Options

Most of all, you need network-based security options backed by advanced threat intelligence and security experts.

Your business is facing some astounding security challenges.    The practice of BYOB or Bring Your Own Bandwidth exacerbates your need to make sure that your network, firewall, switches, routers, thumb drives, laptops, I-pads, workstations, servers, smartphones are secure.   Your employees may use  a variety of devices  at your business (with or without your knowledge) to access vital information.  Consequently, this practice puts your company at risk for vicious cyber-attacks that have the ability to put you out of business.

Cyber criminals may attack your business network via wearable devices, employees’ home systems,  shared thumb drives, field/office laptops that are used in the office, in the field, and at home,  shared hybrid cloud services and even smart automobiles.  Hence, network-based security options are a tried and true investment to protect your business against security threats.

What to do?

First of all, a good place to start is to publish employee Internet policies.  Once published, have each employee sign their acknowledgement of your policies.   So, make a list and publish for your employees that spell out the do’s and don’ts of Wi-Fi,  file hosting services, thumb drives,  smartphones, and tablets.

Especially relevant, you can call Caleidoscope and talk to us about Network-Based Security Options.

Many of our partner vendors offer business grade virus protection for laptops, servers and PC’s.   So, rather than contemplating a budget that includes one, two or ten full-time employees to manage the security threats, why not look at other options?

Network-based security options have advantages.

Because we offer services from leading, user-friendly carriers, you allow experts to do the job for you.   Since we provide this consultative service at no additional cost to you, you have the added benefit of alleviating expenses associated with hiring, managing and paying taxes for dedicated employees.  Therefore, some of our favored, personally vetted, network-based security options  include:

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DSCI Hosted Communications UCx Group Features

GWI Managed Network Security

OTT Reliable Networks Endpoint Security

You can call Caleidoscope Solutions and ask our team about network-based security options.

Call us at 866-462-9259 or e-mail us at info@mycaleidoscope.com.

 

 

 

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Last Mile versus First Mile?

first mileFirst Mile or Last Mile?

Think about the concept of  the first mile versus connectivity versus the last mile in telco connectivity solutions, you can create a new way to look at an old problem.  You can change the paradigm.   The source of funding for “the last 100 feet” of connectivity is significant.  Traditional funding sources  for last-mile connectivity are ISPs,  Telcos, cable companies.  These organizations pass along costs to end users.   The government offers rural subsidies, but there are no guarantees.  Government processes can be risky and cumbersome for third party providers.   While new technologies can be costly to develop, there is pressure to bring innovation to the marketplace.   We must meet the demands for higher-bandwidth connections.  Consequently, innovative solutions require R&D funding.   What if instead, the challenge shifted to explore how to applications applied to the first mile as an alternative to last mile solutions?

In large part, the growth of the Internet is propelled  by user investments in infrastructure.  These include computers, internal wiring, and connections to Internet service providers.  This “bottom-up” approach maximizes investment burdens.    Companies providing the Internet services bare the investment burdens.  Thus, creating first-mile versus last-mile solutions are vital to our thriving, competitive U.S. economy.

The FCC rules that access to the Internet is viewed as a utility and not a luxury as of June of 2016.

Court Backs Rules Treating Internet as Utility, Not Luxury.

In the article I quote below (written by CECILIA KANG  on JUNE 14, 2016), she explains the court’s thinking.

“WASHINGTON — High-speed internet service can be defined as a utility, a federal court has ruled in a sweeping decision clearing the way for more rigorous policing of broadband providers and greater protections for web users.

The decision affirmed the government’s view that broadband is as essential as the phone and power.   High-Speed Internet should be available to all Americans.  It should not need close government supervision.

The 2-to-1 decision from a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit on Tuesday came in a case about rules applying to a doctrine known as net neutrality.  This decision now prohibits  broadband companies from blocking or slowing the delivery of internet content to consumers”.

How Does Rural America Obtain HP Internet Access?

The New York Times published an interesting article on August 7, 2016, called “How to Give Rural America Broadband? Look to the Early 1900s.” 

Explore the reality of how rural Americans reach high-speed Internet access today by reading the article.  The article compares today’s model with one used back in the early 1900’s to provide basic telephone services to rural communities to provide businesses and homes with the first mile.

“Now high-speed internet is finally reaching these remote places, but not through the telecom and cable companies that have wired most of urban America.  Instead, local power companies are more often the broadband suppliers — and to bring the service, they are borrowing techniques and infrastructure used to electrify the United States nearly a century ago”.

Enable the “first 100 feet” as an opportunity.  Hence, you can change the model and control of ownership.   Individuals, businesses, and policymakers must rethink fundamental issues that exist in telecommunications, policies.   Thus, problems can be solved with innovative technology.

Finally,  rethink how to enable 100% of American’s access to high-speed Internet by non-traditional providers of telecommunications services such as cities and utilities.  Can this model potentially provide more rural businesses and homes with high-speed Internet?  This is a good question to ask ourselves.

 

 

 

 

 

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How the IoT Will Change Us

IoT (the Internet of Things) will Change Us

IOT

The acronym IoT means the Internet of Things.

June 7, 2016 –  I read a very solid article today written by Jamie Maidson of Webspherejournal.  Jamie Madison is the Marketing Director at Steadfast, a leading IT Data Center Service company. What I like about this piece, is how simply she  states and presents observations of how the Internet will change our world in the future.  This observation is based on the disruptive and innovative influences of the Internet.

We live in extraordinary times.   France passed a law to make it illegal to text employees with over fifty employees on the weekend.   People are disconnecting from devices that require 7 x 24 observation.  Our stress burnout from the “need it now” culture is real.  Eventually, tattoo removal parlors will become as mainstream as tattoos.  Flip phones and dumb cars will  find a nitch again.  For laymen, this article predicts, in simple terms, how the Internet of Things will change our world.  I like the common sense observations and predictions.  Many of them have already become our pop and business culture.  Here is the verbatim report from Jamie Maidson.  Read it and see if you agree.

The Internet of Things has the Potential to Completely Change how we Live and Work

Again, according to Jamie Maidson’s webspherejournal article published  today, the IOT is changing life as we know it.   It’s already causing an evolution in the workplace – especially where IT is involved.

Most of all, there will be over 38 billion connected devices by 2020.  In the interest of convenience and efficiency, we are embeddng computers into pretty much every single product and appliance we use. These products range from fridges and blenders to thermostats, security systems, automobiles. Wi-Fi connected devices are no longer an oddity or for use simply by the elite; they’re a regularity in both our personal and professional lives.
Not surprisingly, this means that they have the potential to bring about considerable change in the workplace – and nowhere will that change be more evident than in the IT department. Today, I’d like to discuss just a few ways the Internet of Things will impact administrators everywhere.

IT Will Truly Have Its Hands in Every Pie

First and foremost, with IoT devices prevalent in both the workplace and your company’s products, the IT department will need to expand its reach to every corner of the company.  Management of the devices will evolve in order to accommodate an influx of new devices.  Developers will encounter new and previously unheard-of challenges related to embedded software.

“The change from adding IoT “smarts” to existing devices and creating devices with IoT components built-in will be transformative,” writes Network Exchange Blog’s Scott Koegler. “Progressive companies are creating modules that are designed to be built into their products, looking at the information about their products, and designing sensors that monitor specific conditions. The intelligence to deal with the data is created before the product design is finalized, so that IT is part of the product, rather than added to it.”

The Role of Administrators Will Change Considerably

There was a time when administrators were the sole distribution channel for internal applications and enterprise software. Mobility saw that role dissolved, and as more control passed into the hands of the end user, IT professionals shifted towards management, rather than control. The Internet of Things will only further this shift, and any administrator who doesn’t understand concepts such as big data, cloud architecture, and IoT-oriented protocols will be left behind.

Everything Will Grow More Agile.

Imagine a business with intimate insight into every decision it makes and every operational shift that occurs. A business that knows exactly what its customers want, precisely when they want it. Now imagine that business is equipped with the capacity to react instantly to those shifting needs and demands.
That’s what the Internet of Things will enable – data gathered from embedded sensors will offer insight into everything from employee productivity to consumer purchasing habits. At the same time, that information is going to be difficult to analyze and organize, based on sheer volume alone. For that reason…

Data Science Will Become a Must-Have

Data science is  extremely important. The capacity to visualize, conceptualize, and organize concepts based on massive streams of disjointed information will prove to be invaluable for future business analytics.  Thus, this is a trend which IoT will drive.
“IoT and big data basically are two sides of the same coin,” reads a piece on data science blog Data Informed. “Managing and extracting value from IoT data is the biggest challenge that companies face. Organizations should set up a proper analytics platform/infrastructure to analyze the IoT data.   So, they should remember that not all IoT data is important.”

You’ll Have to Confront the Sticky Issue of Software Liability

Currently, most states lack liability laws related to software.  This allows multiple vendors to draft contracts that absolve them of all liability in the event that the security software in their devices should fail. Regulators turn a wary eye towards this practice as well as IoT security in general.  I have purposely not referenced the “dark net.”  While it’s unlikely that we’re going to see any changes in the immediate future, your business will eventually have to confront the issue of software liability – so it’s better that you prepare yourself sooner, rather than later.

The IOT

The Obama administration and the FCC attempt to control the Internet.   The cyber war occurs on a global scale everyday.  It is in the news and impacts daily life.  The cyber war manifests itself  in the form of hacking, email spoofing, privacy invasions, bank fraud, small and large firm database breaches – to name a few.  The IOT is a topic that we all need to stay current on.  Social media both offers help as well as hinders progress.

So, I do not watch the news on television.  I read business publications one line and in print, Twitter, FB, RSS feeds, blogs, browser search.   Mainly, I use the Internet.   So, since anyone can write anything on the Internet, you should be carefully not to believe everything you read.  Not all writers on the Internet are journalists with degrees, experience, and associated credentials.  Readers must be careful of their sources and read each article and not just the headline.  Most relevant, you can research the writer or blogger.  I am often sensitive to errors in internet reporting.  Did you see typos or grammatical mistakes in the article?  Check your sources and search for the topic via multiple sources.

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Charter, Time Warner, Bright House

Charter CommunicationsPress Release Excerpts May 2015

Charter Communications completed transactions in which Charter Communications acquired Time Warner Cable and Bright House Networks.

Therefore, the combination of Charter Communications, Time Warner Cable, and Bright House creates a leading broadband services and technology company, serving over 25 million customers in 41 states.  The company’s objective is to provide high-quality products at great prices.  So they back up their products with excellent customer service.  Also, they will continually improve the way they do business.  They intend to be the very best at what they do.

Most of all, the newly merged company will be led by Tom Rutledge, who serves as Chairman of the Board, President, and CEO.   The new Board of Directors consists of 13 directors.

About the New Company

Charter

Charter is a leading broadband communications company.  It is the second largest cable operator in the United States. They provide a full range of advanced broadband services, including Spectrum TV™ video entertainment programming, Spectrum Internet™ access, and Spectrum Voice™.   Hence, Spectrum Business™ similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations.  Furthermore, they provide products including  business-to-business Internet access, data networking, business telephone, video and music entertainment services, and wireless backhaul.  The fiber services they offer include internet, networking, voice communications, managed services and commercial video

Time Warner/Charter Cable  is a Caleidoscope partner since 2012.

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Role of Telecom Providers is Changing

Telecom Providers are in the Midst of Massive Changes.

What is the Telecom Provider’s Role in a Digital Economy?Telecom Providers  Disruptive and innovative technologies are all-pervading in all vertical industries.

I see the impact changing roles and innovations have my our business customers as well as on my own company, Caleidoscope Solutions.   I am always looking for simple answers to complex questions about voice and data.  I found this article by Tom Loozen, Global Managing Director at Accenture.  Accenture is a multinational consulting services company located in Dublin, Ireland.  He poses this question and provides great insights below in his article in rcrwirelessnews.com.  I summarized what are, for me, the key takeaway points below in bold; the following are excerpts from the article.

Wireline and wireless service providers who have staked their business on voice and messaging revenue must now grapple with the harsh realities of a different market with different demands.

Digital growth has opened the floodgates to a number of companies adopting the same role as telecom providers by offering similar packages of broadband, voice and messaging services. From Internet search providers to computer manufacturers, there are now more competitors with which to contend, and each is on an equal footing with the established names that preceded them. Digital has disrupted the market to the point where customers are no longer “owned” by a single provider, but shared across multiple providers. With more competitors attempting to claim their share, the revenue such customers can generate for service providers is limited.

The challenges don’t end there. Digital enables enhanced services. Short-range alternative public hot spots and white label networks are emerging technologies that appeal to customers. Digital “pure plays” who started from a digital foundation are better equipped to provide such services than incumbents who still rely on slow and inflexible IT architectures ingrained in their operations.

So what can telecom incumbents do to get back in the race? Going head-to-head with their digital competitors is a losing battle. Doing nothing is the surest way to defeat. To thrive in this digital economy, operators must re-imagine their core businesses and find ways to turn this disruption to their advantage. They need to take on a new market role. Instead of vying with competitors head on, they need to help them succeed.

Historically, incumbents have provided communications services outright. But now the better opportunity is enabling others to provide those same services. Incumbents should reside in the middle of the digital economy providing the network that powers the digital services of device manufacturers, over-the-top providers, media companies, developers, solution vendors and numerous vertical industries.

In the digital economy, the role of the incumbent has evolved into an integrated digital service provider, operating as a platform for all things digital for their own services and third-party companies. IDSPs feed into the “platform revolution” trend in which companies use digital technologies – social, mobile, analytics and cloud – to build a specific set of services that help other businesses develop and deploy their digital offerings.

Telecom Providers need to deliver seamless customer experiences
Create larger, omnichannels that marry Web, mobile, social, retail, in-store, call center and other touch points for a consistent, shared experience customers can enjoy. Telecom incumbents can sell more efficiently in an omnichannel while increasing customer loyalty through added convenience.

Telecom Providers should specialize the network
Instead of striving for commoditization, operators should differentiate their network capabilities, capacities and solutions for premium revenue. The more unique a service, the better.

Telecom Providers must create a multispeed IT architecture
Create multiple tiers in IT architecture that can accommodate digital services while also simplifying legacy systems for greater agility. Invest in new digital technologies, and build an application programming interface layer, to expose core data to faster-moving digital channels and ecosystem partners.

Telecom Providers should focus on leveraging partnerships
Form business relationships across multiple industries that will be the basis for building a digital platform and winning more business.

Telecom Providers must invest in security
According to Accenture’s Digital Consumer Survey, nearly one-third of consumers trusted service providers the most with their personal data. IDSPs can capitalize on this trust by building separate security and privacy services. Security will continue to be a pervasive IoT concern.

Telecom Providers should offer a way to monetize data

You can read the full article by clicking the hotlink above.  His takeaway advice is priceless.  “…turn this disruption to their advantage…”

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Data Center Sell Off

Why are Large Carriers selling off Data Centers?data center

According to insider sources, selling off data centers still does not alleviate operations headaches!   Read the following article by www.networkworld.com and gain insights into the behind the scenes challenges of cloud data centers.

 

In an article on March 10, 2016, networkworld.com‘s article about data center infrastructure. The topic is highly educational and provides an insider’s perspective on an important topic.
“Numerous telcos, like Verizon, CenturyLink and Tata, have publicly said they are evaluating the feasibility of selling off data center assets. This seems to have created a flurry of hasty conclusions that ‘the data center is dead’.
We saw this assertion previously beginning in 2012 around talk of the demise of the data center due to the rise of cloud computing. But as we know now, the cloud simply changes where the applications are running. It all goes to a data center somewhere. And it is clear in 2016 that the need for strong data center operations is as critical as ever, perhaps even more so.

for any organization to sell its data center assets belongs to the Chief Financial Officer. This is when getting an asset ‘off the books’ becomes a catch-all for a variety of motivations, and involves depreciation cycles, cash flow, capital reserves, and assuring shareholders that an organization is only ‘carrying’ assets that are core to its business. Be assured that these specialists are not selling data centers because they are no longer valuable to their business.
Regardless of the final commercial transaction, such as a sale-leaseback, the data center operations may be unaffected. A real estate transaction does not necessarily change the configuration of the equipment. And, preliminary insight into some of the telcos considering to sell their data centers is that the staff will not likely change. I’d also say it’s perilous to assume that a change to the name on the building title changes everyone’s IT performance requirement.

The report makes an interesting observation by stating that “Enterprise IT typically demands more of their outsourcers than from their own team. An enterprise IT organization may readily admit the shortcoming of its team, but would certainly not select a service provider with holes in their capabilities. A change to an outsourced model, even by title alone, will bring increased scrutiny on the effectiveness and efficacy of data center operations programs. In the last few years, other parties have entered this space with third-party certifications developed specifically for data center operations”.

It also goes on to state …”You can dangerously assume that all service providers have your best interests, and superlative performance, as their business model. Or that in this configuration that there is no need for oversight. This short-sighted behavior is not uncommon, and ironic in organizations that have once- or twice-a-year due diligence assessments of their data center infrastructure, which is likely static.
Yet, they do not have the same for the operations, which is highly dynamic and represents a 3x risk exposure than the infrastructure itself. Data center equipment does not change year-over-year. You may have end-of-life replacement, but that occurs approximately every 10 years. In the event of a capacity expansion, this will lead to more equipment being installed, but not a fundamental change to design philosophy. However, staff turnover may be multiple times in a year, and an operating philosophy can be strongly dictated by the person leading it”.

So when choosing a data center, there are many things to consider.  This article makes a great point that …”The important reality is that data center management is a business, and must be both practical and profitable. To remain viable and competitive, your management company must look for ways to do more with less. Shared resourcing is more common than you may think, meaning your 7 x 24 might be the same person at one or more other sites. Do you know your 7 x 24 expectation is actually a 1-hour response time SLA because it is cheaper for your operations company? How do you protect your operations program  against such cost shavings measures?”

Windstream Completes Data Center Sale to TierPoint

December 21, 2015, www.zacks.com reported that Windstream Holdings Inc., a leading communications and technology solutions provider in the U.S, has announced closure of the sale of its data center assets to cloud computing provider, TierPoint LLC, for $575 million. Windstream looks to utilize the proceeds for debt reduction and toward funding its newly announced Project Excel that is aimed at modernizing and upgrading its broadband capabilities.

Following the transaction, TierPoint and Windstream will cross-sell each other’s services under a reciprocal service agreement. This means the two companies will be able to sell their respective services to each other’s customers through referrals. However, Windstream will not incur expenses to operate the data centers in the future. This will allow the company to focus instead on its core telecom and broadband functions while continuing to provide traditional data center services across a broader customer base. This, in turn, should create a positive impact on its margins.

Additionally, the sale will allow Windstream to fund Project Excel – a $250 million program designed to upgrade and extend the company’s existing broadband network and strengthen its competitive position in the market. Upon completion of the project, the company will be able to provide speeds of up to 50 Megabits to its rural customers. This, successfully done, will mean enhanced customer experience and robust market share gains, resulting in higher ARPU.

Windstream has a highly leveraged balance sheet. The company exited the third quarter of 2015 with $97.2 million of cash and cash equivalents compared with $103.7 million at the end of Sep 30, 2014. Long-term debt at the end of the third quarter totaled $5,693.4 million. While the company is extensively increasing investment to expand its operations, it is doing so through debt, thereby straining its financial position. Windstream believes that the proceeds from the sale of its data center assets will enable debt reduction of approximately $300 million, resulting in a stronger balance sheet.

Windstream Data Sale Update

11/03/2015  According to Windstream.com, the proposed sale of Windstream’s data centers is now a done deal.  Here is an update from our post in August article about Windstream and the proposed sale of the data centers.  The data centers have now been sold.

Windstream Remains Committed to Providing Data Center Services for Enterprise Customers Through Strategic Partnerships

“Oct. 19, 2015., a leading provider of advanced network communications, today announced that it has entered into a definitive agreement with TierPoint, a leading national provider of cloud, colocation and managed services, to sell Windstream’s data center business in an all cash transaction for $575 million.

As part of the transaction, Windstream will establish an ongoing reciprocal strategic partnership with TierPoint, allowing both companies to sell their respective products and services to each other’s prospective customers through referrals. This structure will allow Windstream to focus capital on its core telecom offerings while continuing to offer traditional data center services to enterprise customers across a broader data center footprint”.

Windstream Considers Divesting from Data Centers

August 24, 2015 According to Fierce Telecom’s writer, Sean Buckley, Windstream, (like other large telcos), purchased the capacity to offer enterprise customers data centers services that included colocation, managed data services, cloud services, and hosted solutions in recent years.

Fierce Telecom reports that the fierce competition of services like Amazon Web Services and other competitive cloud providers, along with FCC monitored challenges of maintaining wirelines businesses, telcos like Windstream, Verizon and CenturyLink are considering divesting from data centers.  According to Bloomberg.com “Windstream is looking to sell their data centers business, Windstream Hosted Solutions, reports Bloomberg citing people close to the company”.
Also according to Bloomberg, the telco has hired Royal Bank of Canada to help it sell the division with hopes of raising $500 million to $750 million.

Fierce Telecom reports that some of the potential parties cited by unnamed sources that could be interested in purchasing Hosted Solutions include private-equity players ABRY Partners and GI Partners. Similar to its ILEC brothers Verizon and CenturyLink, Windstream bought its way into the data center business by purchasing the hosted solutions business from ABRY in 2010 for $310 million. Since that time, Windstream has continued to build its data centers and related services base, scaling its footprint to 25 data centers in 16 markets.

Entering the data center business made sense for Windstream as it gave the company another revenue source in the business market to battle the ongoing declines of its traditional wireline POTS (plain old telephone service) business. What may be driving Windstream to consider a sale of the business are two factors: costs of maintaining these facilities, and competition from competitors like Amazon, a dominant data center and cloud services player.

A recent Synergy Research report revealed that Amazon Web Services continued to hold a dominant spot in the cloud infrastructure market.

During the second quarter, data center and related managed IP-based services were a factor in the company’s revenue results. Due to the demand for IP-based solutions and next generation data, enterprise service revenues were $485 million, up 3.5 percent from the same period a year ago. Likewise, data and integrated solution service revenues within Enterprise also grew approximately 7.3 percent. Within the enterprise services business, the service provider also launched a number of other complementary initiatives, including an expansion of its on-net building fiber footprint, a move that will reduce network access costs to Tier 1 service providers like AT&T.

Potential bidders for the unit of the Little Rock, Arkansas-based telecommunications firm include private-equity players ABRY Partners and GI Partners, said one of the people, who asked not to be identified because the matter is private. Windstream purchased the hosted-solutions business from ABRY in 2010 for $310 million.

Windstream shares jumped as much as 10 percent on the news and closed up 6.4 percent at $6.69 in New York.

Phone companies including Windstream added data centers to offer storage and other so-called cloud services in an attempt to find new growth as their landline business declined. The cost of maintaining these temperature-controlled facilities, known as server farms, plus the competition from larger rivals including Amazon.com Inc., have created challenges.

As a broker of communications solutions, Caleidoscope Solutions offers customers choices for Data Centers located locally, nationwide and globally.

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Wireline Assets

Are Wireline Assets Being Neglected?Special Access Discounts

December 15, 2015 Greg Facemyer and Joe Derella’s article in www.nj.com stresses real life challenges of businesses in rural New Jersey towns impacted by Verizon’s service availability.
Can you imagine trying to conduct business in today’s world with no high-speed Internet access, no cellular phone service, and landline telephone service that fails during wet weather? This is exactly the state of affairs in many rural communities, and this is exactly why 16 South Jersey municipalities have filed a petition for relief from the state Board of Public Utilities…
In the most densely populated state in the nation, it is unfathomable that there are still areas totally reliant upon decades-old copper telephone lines for communication. This is not by choice, but by default because there are no alternatives in many of these areas. There is no fiber optic wire or cable TV wire for high-speed Internet access or Internet telephone line service, and cellular service is nonexistent or spotty at best. Our under-served areas are saddled with antiquated and deteriorating copper-based, wireline assets as their infrastructure. We are on the dark side of the digital divide.

Contrast this with the other side of the digital divide, affluent areas with fiber-based infrastructure where people and businesses can access the Internet at data speeds exceeding the federal standard, as well as communicate via mobile smart devices.

 www.dslreports.com reports that 16 municipalities from four counties in South Jersey have filed a petition with the New Jersey Board of Public Utilities to prevent Verizon from abandoning its copper POTS and DSL customers in the state.

Verizon Blasts CWA Copper Network Claimswireline assets

In February of 2015, Frontier purchased Verizon’s wireline footprint with $10.5B Verizon purchase.  It seems obvious that Frontier is acquiring wireline assets networks and Verizon is shedding them.   Is FairPoint next?

According to Fierce Telecom’s Sean Buckley’s November 30th article, Verizon is quoted as saying  “the Communications Workers of America (CWA) union’s claims that the telco is abandoning its copper networks in various states is just a labor negotiation tactic”.

By moving customers from copper wireline assets to fiber, Verizon maintains that the greater reliability of fiber provides a number of benefits to customers. Verizon said that it experienced 1.4 million fewer repair or troubleshooting dispatches than would have been required had these customers remained on copper wireline assets’  facilities.

The CWA has continued to blast Verizon for taking part in what is referred to as “de facto” copper wireline assets retirement, a practice where a telco would let copper wireline asset factilities degrade to the point where they would have no choice but to replace them with fiber.

The service provider and workers represented by the CWA have been operating without a contract since September.

“CWA’s assertions here are straight out of its announced labor negotiation playbook, in which it calls on its members to ‘build political and regulatory pressure on the company’ as a negotiation strategy,” Verizon said in an FCC filing.  “CWA admits as much, acknowledging that its ‘survey’ of technicians it relies on in its comments was conducted in connection with forming its strategy ‘for pending negotiations’ with Verizon.   CWA’s allegations should be reviewed in context with its efforts to further its own parochial interests in ongoing labor negotiations with Verizon.”
Verizon maintains that has continued to enhance its last-mile network by performing necessary maintenance on its copper network while “currently passing approximately 20 million premises with fiber.”

On November 21, 2015, the FCC issued a news release. The news release states that where it proposed facilitating technology transitions by modernizing consumer protection and competition rules.

What this means for consumers is that the FCC  put several new rules in place to regulate telecom companies looking to move away from the old copper wires that have carried voices across town and around the world for more than a century.  Prior to this ruling by the FCC, if you wanted to know what was going on with your carrier’s network decisions, you’d need to go online to the FCC’s website and try to find your answers. Gratefully, now your phone company has to tell you, directly.

The FCC states that its proposal is meant to preserve access to 911, increase transparency, and maintain competitive choices.
The FCC  is taking steps to facilitate the ongoing transitions in the nation’s communications networks, the Federal Communications Commission is seeking comment on modernizing its rules to ensure access to 911 service, protect consumers, and preserve competition as the transitions move forward. The nation’s communications networks are shifting from copper networks using legacy technologies to fiber, coaxial cable, and wireless networks using Internet Protocol (IP)-based technologies to carry voice, data and video.

The Notice of Proposed Rulemaking adopted by the FCC today includes proposals to update rules ensuring access to public safety, protecting consumers faced with network changes and discontinuation of services, and preserving wholesale access to last-mile networks by competitive providers serving businesses and large institutions.This modernization of FCC rules will help expedite the transition to next generation networks byprotecting core network values in order to give consumers and businesses the confidence they need to embrace technological change and all its benefits.

Excerpts of the proposed FCC ruling include:

  • Greater transparency, consumer protection, and opportunities for consumer input when carriers are planning to shut down (or “retire”) their existing copper networks.
  • Sets in motion a process to ensure that new services meet the needs of consumers before carriers are allowed to remove legacy services from the marketplace.
  • Asks for facts and data about whether carriers are, in effect, retiring copper networks without giving notice simply by failing to maintain them.
  • Asks about allegations that carriers are not being clear with consumers about the options available when the copper network is shut down.Preserving and Encouraging CompetitionSmall and medium-sized businesses, schools, hospitals, and other government institutions often rely on services delivered by competitive broadband and phone providers. Yet competitive providers may no longer be able to reach customers if incumbent carriers withdraw certain “last mile” services.
  • Tentatively concludes that carriers seeking to discontinue a service used as a wholesale input should be required to provide competitive carriers equivalent wholesale access going forward.
  • Proposes to update the FCC’s rules so that competitive carriers receive sufficient notice of when copper networks are being shut off, so that they can continue to serve their customers effectively.

Declaratory Ruling

The FCC also adopted a Declaratory Ruling clarifying that the circumstances in which a carrier must seek approval to discontinue a service depend upon the practical impact of its actions, not the fine print of an aging tariff filing. This ensures that there will be a public process to evaluate a proposed discontinuance before a choice is removed from the market, regardless of how the carrier has written its tariff.

Verizon’s Wireline Assets Copper Network is the Subject of Complaints. 

Verizon Copper LInes

Verizon Land Line Equipment

The Communications Workers of America have been quoted as saying that Verizon has neglected Maryland’s copper network according to Fierce Telecom‘s Sean Buckley’s article today.

November 16, 2015  Verizon is being called to task about its copper network in Maryland by the Communications Workers of America (CWA) union, which has filed a letter with the state’s Public Service Commission to investigate the quality of the telco’s copper network.
CWA said in its letter that it examined Verizon’s network equipment in areas of Maryland where it has not built out FTTH FiOS service and only offers copper-based DSL and POTS voice services.
In its investigation (PDF), the CWA reported there are a number locations “that are so damaged as to impact service quality.” Amongst the various issues it cited were poles that were damaged, unsecured and broken, damaged and exposed cable and splice terminals, bypassed damaged cable, and equipment that shows evidence of damage caused by animals.

In a similar report in October by Philly.com, a line worker reported photographic evidence implying that Verizon has been depriving
its aging copper network of money for maintenance and repaira throughout parts of Pennsylvania.

The Verizon Union, which represents 4,980 lineman, technicians, and customer service representatives in the State of Pennsylvania,
filed a petition with the Pennsylvania Public Utility seeking an investigation.

“Debbie Goldman, CWA’s telecommunications policy director in Washington, said Verizon could be fined $1,000 a day per violation if the PUC finds that the company violated state utility laws by not providing a ‘safe and reliable’ network for customers and employees.

The CWA has not reported any workers hurt because of the condition of Verizon’s copper network. But the union told Pennsylvania utility regulators in a letter in September that thousands of people had complained about copper line-related service problems, based on state regulatory data.

‘We know this is endemic across the footprint,’ Goldman said, saying similar conditions existed in other Verizon states.”

As Verizon’s traditional copper network deteriorates and the company fails to extend FiOS to those areas, the union says, Verizon could force customers to its wireless products over time.
Verizon’s wireless division workforce is mostly nonunion, while the employees in its wire-line division – the copper and FiOS networks – are mostly union.

The FCC approves sale of Verizon’s wireline assets to Frontier Communications for $10.54 billion.

September 3, 2015   More Verizon wireline assets approved for sale to Frontier by FCC.  Frontier will now acquire wireline assets properties in California, Florida, and Texas.

According to a report today by bidnessetc.com, “Fran Shammo, CFO Verizon plans to sell its non-core assets which the company thinks do not align well with the company’s long-term goals. Along with wireline assets, the company is also looking to offload even more assets, however, no new deals have been announced yet. The current sale will reduce wireline assets by roughly 21%.

Verizon’s public policy and government affairs senior VP and deputy general counsel, Michael E. Glover, appreciated FCC’s approval and said that the deal is in the best interest of users located across the three regions, and that it will not result in increased competition in the market.

The wireline assets sale is expected to be finalized in the first quarter of 2016 (1QFY16).

The report states the reason Verizon is selling its wireline assets is that the segment is not generating growth in its net earnings. Although the wireline assets segment generated year-over-year (YoY) growth of 4.5% in 2QFY15, it reported a YoY decline of 2.1% in its EBITDA”.

prnewswire.com announced that the FCC also reported the approval of the proposed $10.54 billion sale of local wireline asset operations in California, Florida, and Texas to Frontier Communications on September 2nd.

Verizon Wireline Assets

The FCC states – “The following statement should be attributed to Michael E. Glover, senior vice president and deputy general counsel, Verizon public policy and government affairs:

‘We appreciate the FCC’s thorough review and timely approval which confirms that this transaction is in the public interest and will benefit customers in California, Florida and Texas. Last May, the U.S. Department of Justice also reviewed and cleared the proposed sale, further confirming that the transaction does not present market competition issues. With these approvals in hand, we look forward to promptly receiving the remaining regulatory approvals in the coming months’.

The proposed sale of Verizon’s wireline properties in California, Florida, and Texas, to Frontier Communications was announced on February 5, 2015. The companies anticipate the completion of the transaction by the end of the first quarter of 2016”.

Earlier this week, Sean Buckley of Fierce Telecom reported that Verizon passed on $144M in CAF II funding feeding speculative rumors of the wireline assets sale.

The Fierce Telecom article announced that “Verizon is not accepting funding of $144 million total per year for six years to expand broadband in the rural areas it serves from the second phase of the FCC’s Connect America Fund (CAF-II), fueling new rumors that it’s considering a sale of another large piece of its wireline asset portfolio.

According to a Broadband DSL Reports article, speculation has emerged that Verizon is in talks with an unnamed service provider to sell more of its wireline assets, with a deal that could be announced early next year.

Fellow Telco’s AT&T and CenturyLink opted to accept $472 million and $500 million respectively to extend broadband services in hard-to-reach rural parts of their territories.

News of Verizon refusing to accept the CAF-II funding should not be of any great surprise. Verizon was offered $19.7 million in 2012 but did not give a specific reason for turning down the FCC’s CAF-I funding other than to say that the amount they were offered was ‘relatively small’.

However, Verizon, which is in the process of selling off its wireline assets to Frontier in California, Florida and Texas, said in an FCC filing that it conditionally accepted the CAF-II offer of $32 million in California and a $17 million annual amount in Texas.

Verizon accepted the CAF-II funds, which will be set aside for Frontier when it completes its acquisition of Verizon’s assets in these three states. While Verizon and Frontier are still working to obtain necessary state and federal regulatory approvals to close the deal, the date to accept the CAF-II funding is happening before Verizon and Frontier obtained all of these approvals. Verizon turned down CAF-I funding when it was offered to them in 2013.

For its own part, Frontier accepted $283 million in annual CAF-II support from the FCC that it says will enable it to build out broadband service to over 650,000 rural locations.

‘Verizon’s track record is clear,” said Bob Master, assistant to the vice president of District One of the CWA, in a statement. ‘Even while raking in a billion dollars per month in profits, Verizon is turning its back on underserved communities by refusing federal subsidies to expand high-speed internet access’.

The Communications Workers of America (CWA) union, which has been engaged in a contentious union contract negotiation process with Verizon, said that the telco is putting its rural customers at a disadvantage”.

News stories about the fate of our nation’s wireline assets is a topic worth following.

 

 

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Global VoIP Market

Canada is in the Top 10 of Global VoIP Market Users.Global VoIP Market

It is interesting to see how other countries are utilizing VoIP services to win the race in a war to win global business customers. The following articles offer glimpses into the current state of the global VoIP market in Canada.

October 01, 2015 An article by TMCnet’s Michelle Amodio …”The rapidly growing adoption of smart portable devices such as Smartphones and tablets in the residential and corporate sectors is driving the global VoIP services market, and Canada is no exception. Players in the global VoIP services market have benefited from the emergence of VoIP services; the Canadian market ranks in the top 10 of VoIP usage on a global scale.

According to CRTC data collection, some of the biggest players in the Canadian telecommunications industry captured 97 percent of the total industry revenues in 2012 and 2013.
Traditionally, large incumbent TSPs took the lion’s share of long distance services in Canada. With the introduction of competition in 1992, other service providers, namely VoIP providers, have entered the market, thus spurring a thriving landscape for providers.
Many businesses have migrated over to a VoIP system for its cost-effective, revenue-generating features, not to mention it has become the keystone to how businesses operate. Effective communication means effective business, so it’s no surprise that VoIP has and will continue to see serious growth beyond the U.S.
Market talk aside, there’s a reason the Global VoIP Market is doing so well.
Internet telephony enables users to integrate software programs, such as e-mail, e-fax, and remote conferencing over the Internet via the telephone. In other words, a VoIP user can speak to somebody over the phone while accessing other applications, including the Internet, simultaneously. VoIP users can take their adapters anywhere, making it possible to hold telephone conversations at venues that offer an Internet connection.
VoIP is readily available and so much cheaper to use and maintain than traditional phone services. Phone (News – Alert) lines are becoming more obsolete across many markets internationally. Digital phone service will become the cheapest and most convenient way to communicate with anyone on the planet, making the maintenance of the existing telephone infrastructure unaffordable to maintain.
The bottom line about a VoIP service is that it will save you money without compromising quality of voice or support services. You will also get a magnitude of extra features with your digital phone package that will cost you nothing. Most of the free services a VoIP service provider supplies for free, you pay extra for with the phone plan you are using now.
Staying competitive in business requires using the best tools available. When it comes to business phone service, VoIP wins hands down. Offering numerous benefits without any negatives, VoIP is likely to become the standard telephone option for all businesses in the future””.

VoIP Taking Canada and the World by Storm

In an article published last month in businessreveiwcanada.ca, Adam Groff supports reason’s why VoIP is a technology solution that is making it’s mark on the competitive landscape.
When it comes to efficient communications, VoIP technology is changing the business landscape for the better.
From the features to the flexibility, voice over Internet calling is meeting the needs of businesses across Canada and the rest of the world.

Here are just a few ways VoIP calling is benefiting Canada and the global workplace:

VoIP and Canadian businesses

Voice over Internet protocol is growing in popularity with businesses and industries of all types.
In fact, according to a recent VoIP Market Analysis, VoIP communications is predicted to be an $80 billion industry by the year 2017. One major player in the growth of VoIP is Canada.
From Vancouver to Toronto and every city in between, Canadian businesses are making the switch to VoIP.
As one of the top 10 VoIP countries in the world in terms of usage, Canada already has more than five million subscribers. With the benefits that VoIP phone service provides the workplace, this number is expected to grow in the coming years.

Hassle-free integration

The first question most businesses have when adopting a new technology is how difficult the integration process will be. Technology upgrades usually result in a lengthy installation process with long periods of downtime, but not with VoIP.
Because VoIP works over the Internet, there is minimal hardware to install and little to no wiring or cables involved.  Global VoIP market providers take care of downloading and maintaining all calling software and can do so remotely.
Likewise, businesses can choose to use their existing hardware or upgrade to global VoIP market telephones – both options are plug-and-play, which also reduces integration downtime.

Mobile calling

Most global VoIP market providers offer mobile and remote calling that allows on the go employees to receive and place originating calls from anywhere in the world.
With the VoIP call-forwarding feature, calls that originate in the office can automatically forward to an employee’s home, secondary office, or mobile device.
In addition, calls placed from remote locations can use the same number and extension as the employee’s office phone, which helps globalize the workplace.

Increased efficiency and productivity

Communications efficiency is an important part of the business world. VoIP calling helps increase calling efficiency and office productivity in a number of ways.
For starters, the latest VoIP software uses peer-to-peer technology, which allows for the direct flow of call traffic between two calling points. This reduces server congestion and allows businesses to handle more calls at once.

In addition, VoIP calling features also allow for more communications productivity. Most VoIP services offer virtual voice meetings, auto attendant, video conferencing, document sharing, and much more. All of these features help create a more productive workplace.

VoIP is also a maintenance-free communications technology.

Service providers take care of all the VoIP system upgrades and updates remotely, which allows businesses to concentrate on more important matters.
From the ease of integration to the mobile capabilities, it’s plain to see that the Canadian business world and beyond are benefiting from VoIP.

Caleidoscope Solutions is a full-service broker of services for the Global VoIP Market.  WEe offer services via world-class providers. Contact us to learn more.

 

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