With an interim CEO now at the helm, XO Holdings (news, filings) made an interesting move today. The national CLEC and fiber operator is will be tapping Sprint for MVNO wireless services, including their Wholesale Mobile Integration services. XO will be offering various wireless products to its SMB customers including both 4G and fixed mobile convergence.
Taking on an FMC component lets XO take on a different aspect than many other CLECs. In the future, XO hopes even to offer SMBs the ability to have mobile calls from own location use their WiFi access points and wireline connectivity rather than those wireless towers. That is something they will no doubt be trying to take advantage of in order to accelerate growth, although reselling probably won’t help their low EBITDA margins much.
That it is Sprint that will be underlying the service makes complete sense, as XO and Sprint don’t compete too often in the wireline marketplace, whereas XO does run into AT&T and Verizon a lot. XO’s future still seems likely to end in a sale when Icahn finally decides to move on, but now that I think of it perhaps it could end in some sort of combination with Sprint. Sprint’s limited investment in its fiber infrastructure reflects its age and difficulty of replacement, but XO’s fiber backbone could give them a way back in and perhaps give Icahn a route into a larger telecommunications theatre. Nah, couldn’t happen.
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