Carrier Consolidation Update: June 2014

I haven’t had time to formulate thoughtful analyses of any news items recently, but I have been noticing a lot of news about telecom carrier mergers lately, so I thought I’d summarize some of what I’ve seen… with links, of course, if you want to delve further into any of them.

TeleGeography reports that it sees cellular consolidation on the horizon in India, as the country’s top three cellular carriers dominate the market.  If that happens, India’s wireless industry would simply be joining the ongoing consolidation trend in telecom.

Here in the U.S., we’re following the merger chatter surrounding T-Mobile and Sprint.  BGR’s Zach Epstein provides the details in his overview, referencing CNBC’s video discussing the $2 billion break-up fee and the plans to go with the T-Mobile name and management team post-merger.  Meanwhile, AT&T CEO Randall Stephenson has been widely quoted as noting that a Sprint-T-Mobile merger would reduce the “big four” to a “big three,” the same reasoning cited for disallowing an AT&T-T-Mobile merger three years ago.  Obviously, T-Mobile and Sprint are hoping a merger of the 3rd and 4th largest carriers is more palatable to the FCC and DoJ.

In Europe, the talk is about Telefonica’s proposed acquisition of German wireless carrier E-Plus from KPN.

In the Italian wireless space, Reuters has reported a restart of negotiations between Hutchison Whampoa and Vimpelcom to merge their Italian wireless subsidiaries.  This report came just a week after Hutchison gained final EU approval of its Irish subsidiary’s acquisition of Telefonica’s wireless business in Ireland.

Back in the U.S., on the video side, AT&T continues to push ahead with its proposed acquisition of DirecTV, while Comcast and Time Warner Cable pursue a mega-merger.  In fact, this article suggests the AT&T-DirecTV deal may help boost the likelihood of regulatory approval for Comcast-Time Warner.

One of the interesting aspects of the AT&T-DirecTV acquisition is the role NFL Sunday Ticket plays in the deal.  As this Digital Trends article points out, there is reportedly an opt-out clause for AT&T if DirecTV fails to renew its deal with the NFL.

Meanwhile, Fierce Telecom’s Sean Buckley notes that Level 3 is looking to vastly expand its access on on-net buildings with its proposed acquisition of tw telecom.

I’m sure I may have missed a few, but those are the deals I’ve noticed in the news lately.

Carrier Ethernet Quick Hits: Price Declines Accelerate; Allstream Gets Certified, So Does Cox

Carrier Ethernet has been in the news a bit lately.  Here are a few quick hits:

1) In its CommsUpdate, TeleGeography noted that Ethernet pricing isn’t just declining; rather, it’s decline has accelerated in the past year:

New data from TeleGeography’sEthernet Pricing Service reveal that as Ethernet service availability has grown around the world, price declines have accelerated. Between H1 2013 and H1 2014, median monthly lease prices for 100Mbps point-to-point Ethernet over MPLS (EoMPLS) pseudowires declined an average of 44%, compared to 26% annually since H1 2011.

You can see the acceleration very clearly in TeleGeography’s graphic:

2) Canadian competitive carrier Allstream is trying to differentiate itself via MEF CE 2.0 certification:

“I am proud that Allstream is the first among Canada’s major national carriers to achieve this significant milestone,” said Allstream President Michael Strople. “The MEF CE 2.0 certification reinforces Allstream’s reputation for innovation and provides assurance to our customers that the products and services they are buying are the best in Canada and the world.”

3) CED reported that, in the U.S., Cox Business became the fourth cableco to earn MEF CE 2.0 certification, joining Time Warner Cable Business Class, RCN Business, and Comcast.

4) So, how many MEF CE 2.0 carriers are there?  Yes, I was wondering, too, so I went to the Metro Ethernet Forum website, where I found this Services Certification Registry.  As of this writing, 74 services, offered by 26 companies in 12 countries, are MEF CE 2.0 certified.  (A lot more companies — 72 in 27 countries– are MEF CE 1.0 certified.)

So that’s today’s tour around the Carrier Ethernet space.  I had noticed a flurry of mentions in the last couple of weeks and was curious what was going on in the space.  Perhaps this summary has satisfied your curiosity, as well.  If I missed any other interesting recent Metro Ethernet news, please do share links in the comment section (or you can send it to me and I’ll share it, if you’re one of my industry friends and contacts who doesn’t want to comment yourself).

Wi-Fi Hotspots as a Value Add/Customer Retention Strategy

When I was working in rural telecom a decade ago, I used to tell anyone whose ear I could reach that I thought wi-fi hotspots would be a great way to get people to value our local Internet service as they moved around town. I was concerned that the costs might be prohibitive in relation to the measurable benefits — particularly where competition was still sparse — but I figured it was a strategy that would prove useful at some point in the future. A family-driven relocation forced me to leave that company before that strategy’s time came, and I never did find out if my “earworm” dug its way into anyone’s brain there to resurface when the rural markets began to mature, but I was just reminded of my old strategic thinking by an RCR Wireless news item about Comcast hitting 1 million hotspots.

Tech-savvy consumers may be able to fearlessly navigate external wi-fi networks, but what percentage of the customer base simply wants its service provider-given e-mail to work, no matter where they are? And what would they pay for that, either as a rate premium or in the form of reduced churn?

Just my thought for the day; as always, sparked by an item in the news.