- Normal slowdowns in telecom may not affect the merger and acquisition activity in fiber broadband
- The CEO of OneVizion is seeing a typical slowdown in the broadband industry due to the election and the year end
- But the CEO of FiberLight says he’s not seeing any slowdown in the interest in deals to consolidate fiber companies
Even though the broadband industry is gearing up for 2025 when we may see a lot of fiber deployments and merger and consolidation activity, Fierce Network wondered if there would be a slowdown in activity as we near the election and finish the year. The answer is: yes and no.
John Patton, CEO of OneVizion, said his company is seeing a slowdown in IT departments right now as people take a pause to see who wins the presidential election. OneVizion provides software that helps companies manage their inventory and processes with spreadsheets.
“What we’re seeing is a slowdown in replacing systems right now — IT and fiber construction systems,” said Patton. Asked if this year is special with the Trump versus Harris matchup, Patton said not really. “We see it every four years.”
He noted that national elections cause a pause in November and then telecom companies generally don’t make big buying decisions in December as they make year-end updates on computer systems and close their books. “It’s just a cycle that we know in corporate America,” he said.
Patton speculated that if Trump wins the presidency that could potentially have a negative impact on the Broadband Equity, Access and Deployment Fund (BEAD) program.
Fierce asked how that would be possible, given the fact that BEAD is part of the Infrastructure Investment and Jobs Act, which was passed by a bi-partisan vote in Congress. Patton said Trump could appoint a new BEAD leader at the National Telecommunications and Information Administration (NTIA) with an order to “slow-roll” the program.
Fiber consolidation
Aside from a possible slow-down in the broadband industry this fall, we wondered if there would be a slow-down in fiber company consolidation.
This year has seen some major consolidation activity, including Verizon’s $20 billion all-cash offer to acquire Frontier, T-Mobile’s joint ventures for Lumos and Metronet, and AT&T’s planned expansion of its joint venture with Gigapower.
Just last week, Reuters reported that Zayo and TPG are interested in the fiber and small cell assets of Crown Castle, which could be valued at nearly $10 billion. And Segra announced that it has acquired Everstream’s all-fiber network in the St. Louis metropolitan area.
But will all the activity take a pause for the rest of the year, given the uncertain outcome of the election and general year-end closing activities?
Bill Major, CEO of the fiber operator FiberLight, doesn’t think so. Major has been predicting for a while now that there will be a lot of consolidation in the fiber broadband space.
Of course, everybody’s curious what the election outcome is going to be. But Major said from a regulatory standpoint, both the former Trump administration and the Biden administration have been “favorable” to broadband consolidation.
“Acquisitions haven’t slowed down in the current administration or the previous,” he said. “At the end of the day, the consolidation is going to continue regardless of who’s elected.”
Major said FiberLight, itself, is currently working on an acquisition, which it hopes to announce next year. “It’s a very unique asset that will put us in a good position,” he said. “It is 100% fiber.”
Major also had an opinion on T-Mobile’s move to acquire two fiber companies. Recently, T-Mobile’s CEO Mike Sievert said the company is done with buying fiber companies. But can Sievert really be trusted when he says things like that? Prior to announcing the deals for Lumos and Metronet, Sievert also played down the company’s interest in fiber.
Major concluded, “I think they’ve ginned up the idea for everybody with a fiber company, saying ‘come and pick me up.’”