TW Telecom Closes Offering, Pulls Fiber to MaximumASP

March 17th, 2010 by · 6 Comments

Competitive service provider TW Telecom (NASDAQ:TWTC, news, filings) took further financial steps today in the refinancing activity they announced earlier this month.  First, they have closed their sale of $430M of 8% senior notes due 2018. And second, the early results of the tender offer are in, with $366.5M being tendered and the company receiving consents from 91.6% of holders for the covenant changes.  Amongst those covenant changes was a shortening of the redemption notice period to three days, which they are immediately taking advantage of and will redeem any notes on March 31, the day after the tender offer ends.      Why the rush?  Hmmm, I suppose we’ll have to wait and see.

TW Telecom announced an expansion of its relationship with data center and webhosting provider MaximumASP.  They will be providing a dual entry fiber connection to the company’s data center in Louisville, Kentucky.  TW added about 1000 enterprise buildings to its network in 2009, as they have each of the prior three years.  This increases their total on-net enterprise buildings by around 10%, and they will likely add a similar number in 2010.

But what they haven’t done since the Xspedius acquisition is open any new markets – that number has been 75 for quite a while now.  Their expansion has been powerful, but it has been directed almost entirely into network depth rather than breadth.  The latter seems more likely to come via M&A, the RCN Metro assets being a case in point given TW Telecom’s lack of presence in New England or Pennsylvania.

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Categories: Financials · Metro fiber

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6 Comments So Far

  • mark says:

    The 10k for TW Telecom says they use Time Warner Cable fiber in about 16 markets, and other cable cos in other 8 markets, for about 24 total. In these markets, TW cannot offer residential or content services.

    What does this mean? This seems like a huge disadvantage as to video for enterprise customers (like hospitals). Is that what it means?

    • markoman says:

      do you know where I can find info on which specific markets TWCT leases fiber from TWC, brighthouse, etc. as mentioned in the 2009 10K?


  • Rob Powell says:

    To my knowledge, TW Telecom doesn’t play in the residential or content delivery spaces at all so the disadvantage would be a theoretical one. Perhaps it depends on the details of what are ‘content services’. The intention of those restrictions was to prevent direct competition with the cable company’s customers and little else.

    • Anonymous says:

      How can content or video not be considered a big deal, its all going this way. I agree the definition is important, but I think it should be reviewed for anyone investing in TW. Its cited as a major risk in their 10k and they don’t control their own fiber in those markets. I wonder why no one inquires of this content/video restriction in almost half of their key markets.

      • Anonymous says:

        From what I understand:

        TWT does not share the same fiber, only conduit. different fiber strands – different networks.

        Not really sure about the CDN question – that seems to be a product that TWT does not want to offer. Does the video question imply doctors accessing patients via the internet? not sure what the original question was asking “This seems like a huge disadvantage as to video for enterprise customers (like hospitals)” I hope this helps

  • Dave Rusin says:

    CDN in comparison to the overall Data/IP market is quite small … nothing to get crazy about. Once Level 3 settles on “what’s next” CDN will drop from their vocabulary. seems to be the “CDN” cheerleader …

    The question I have always had relative to TW Telecom getting fibers from the cable company who had an equity interest in them is this — were they paying telecom rates for pole attachments and rights-of-way albeit as they were buried inside a cable companies sheath.

    For years, TW Telecom was very quiet about pole attachment issues until they broke off (for the good) from TW Cable. Now, they are all concerned about pole attachment rates and similar matters.

    Question is to the FCC, States and local communities — have they been paying their fair share of costs if anything for delivering telecom services embedded within a cable franchise authorization? Or, if the Cable Franchise did not permit such services, what is the recourse? If so, how many on-net buildings are technically illegal under the TW Cable franchise … of course, unless all this was disclosed to the local franchise authorities and was perfectly acceptable.

    Fair is fair, after all.

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