More Metro Fiber For Sale: NSTAR

First AGL sold to Zayo, then Fibertech began looking, and now reliable sources tell me that NSTAR Communications is actively seeking bidders.  In the metro fiber business NSTAR flies largely under the radar, without even a website to point to.  Nevertheless, the company has a valuable footprint in Boston and out into the suburbs that covers over 250 high fiber count route miles, and a couple hundred or so on-net buildings.  Apparently, their energy utility parent NSTAR is looking to monetize the asset in a favorable market just as AGL Resources did down in Atlanta.

So who might buy NSTAR’s fiber?  Pretty much anyone in the sector that wants to enter or bulk up in the Boston market, if the price is right.  Of the public companies, I could see any of Level 3, TW Telecom, or Abovenet being interested, with the latter two being more likely at the moment.  Zayo of course could easily be in the picture, I’m sure they would like a foothold in New England.  But one intriguing combination would be matching the energy-utility-derived footprints of Lightower and NSTAR, which would increase Lightower’s density and decrease its regional competition.  Another interesting combination could be with the RCN Metro assets, but since those assets are already in M&A limbo, we’ll have to see what ABRY plans to do assuming that transaction goes through as planned.

There remain various other metro assets owned by energy utilities, and few are being managed as aggressively as their peers.  I expect that if NSTAR is similarly successful in finding a suitable buyer, we will probably see several others go as well.  I’m thinking of assets like Southern Telecom, SRPNet Telecom in Phoenix, DQE in Pittsburgh, and Edison Carrier in southern California.  FPL Fibernet may be an exception, they seem to be more actively investing in network expansion.

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Categories: Mergers and Acquisitions · Metro fiber