Yesterday's blockbuster M&A deal between CenturyLink and Qwest brought in a whole lot of readers looking for answers. I don't pretend to have them all, but of course that has never stopped me before and won't today either. However, please do not hesitate to correct my ramblings in the comments below!
- For the geographically impaired, where exactly is CenturyLink's territory? - Here's a quick map from Wikipedia. Their most extensive territories are in the Pacific Northwest, Colorado, Wisconsin, Missouri, North Carolina, and Florida - with lots of other isolated bits and pieces of course
- Aren't they still integrating Embarq? Won't this distract them and cause chaos? - Actually, they probably have a year before it closes in which to clean up much of the Embarq heavy lifting - this just keeps their lawyers busier. Besides, integrating non-competing ILEC territories isn't actually that hard, and Embarq hasn't been causing them much trouble it seems.
- What's their wireless strategy? - Well, so far it has been to pretend that they don't need one. Speculation often centers around Sprint, but why not go straight to Clearwire and offer them a sweet backhaul deal across the new company's huge coverage area and maybe actually do some of the constructing in exchange for a favorable piece of that WiMAX action? Why grovel forever at the feet of Verizon and AT&T for LTE scraps? By the time this deal goes through, Clearwire will be expanding out of the major markets and deeper into their turf - it may make sense then.
- What will they do with Qwest's longhaul network? - The same thing Qwest has been doing with it of course: operate it until someone overpays for it or the exaflood arrives, whichever comes first. Since they won't actually have it for a year or so, what this does is take that asset out of play in the longhaul consolidation puzzle, which will probably impact the potential of deals between LVLT, GLBC, and Sprint - it may even trigger a deal.
- Will regulators stop it? - Not likely, the two companies don't actually compete head to head in very many places, and therefore competition is not harmed much. Besides, it would make them look awfully silly refusing this one after approving the SBC/AT&T/BLS super-mongo-mega-combo.
- How big is big enough? Will they buy Windstream, Frontier, and Fairpoint too? - Big enough? You have to be kidding right? Ask AT&T if they're big enough yet. I doubt they're done, but CenturyLink won't be able to make its next move until late 2011 - by which time I'll bet Windstream will have bought one or both of the other two.
- When do the layoffs start? Not until after the deal closes, which probably means next summer. Certainly there will be some, but there's plenty of time between now and then for a whole 'nuther recession to hit, so let's put that one on the back burner shall we?
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