TelePacific Purchases Covad Wireless

Privately held CLEC TelePacific (news) is preparing to take a walk on the wireless side with the purchase of Covad Wireless from MegaPath yesterday.  The deal makes a great deal of sense, as Covad Wireless offers fixed wireless services to around 3,500 enterprise customers in California and Nevada, which fits perfectly within TelePacific’s footprint.  They also have a bit in Chicago, I wonder where they will take that part.  The ability to offer fixed wireless services gives TelePacific an additional path around the ILEC to their enterprise customer base.  They also have some metro fiber of course, having picked up the metro assets that once belonged to ICG from the MPower acquisition.

MegaPath, the entity which emerged from this summer’s three headed corporate merger of Covad, MegaPath, and SpeakEasy, is simply taking the opportunity to prune unnecessary branches and focus on its national managed services platform.  Covad Wireless, which derived from Covad’s NextWeb acquisition a few years ago, was a regional provider that didn’t fit that profile and was therefore a non-core asset.  It does seem to make more sense within the orbit of TelePacific, which has an incentive to put money into its expansion.  Since substantial layoffs seem unlikely, I’d guess that Covad Wireless employees probably welcome the deal overall since the uncertainty over the units future within MegaPath would have lingered.

There have been a few rumors lately that TelePacific itself might be a target at some point, but today they showed they are on the prowl themselves.  If there were much independent metro fiber for sale in California and Nevada, I suspect they would be interested in that.  But most of the metro M&A has been east of the Mississippi in 2010.  Well, there’s Edison Carrier Solutions in the LA area, but a wholesale dark fiber footprint like that probably doesn’t suit them well.

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Categories: CLEC · Wireless