The telecom industry is awash in merger talk at the moment, continuing a wave of consolidation that is seeing service providers complement delivery networks with content holdings, and has trickled down to the entire vendor ecosystem as high-capital costs coupled with declining revenues set the stage for new business combinations largely focused on enterprise enablement.
Last week it was AT&T announcing plans to buy Time Warner; yesterday it was Qualcomm looking to acquire NXP; and today it’s what’s being reported as advanced merger talks between Level 3 and CenturyLink.
Louisiana-based CenturyLink, formerly CenturyTel, started as a telephony provider and has grown into an enterprise connectivity provider with cloud and IT service offerings designed to leverage the firm’s 55 North American data centers, 250,000-route-miles of fiber in the U.S. and a 300,000-route-mile global transport network.
Level 3 is a major backbone provider also focused on enterprise connectivity and managed services, which operates in 60 countries on three continents.
the Wall Street Journal, citing “people familiar with the matter,” first reported the potential merger on Thursday. Neither company has commented, although specifics of a merger “could be announced in the coming weeks,” according to the article. Both companies saw an increase in stock price following the news.
Rich Smith of Motley Fool wrote that with a potential combination, “Investors should expect to be regaled with promises from corporate management of significant cost-saving ‘synergies’ from such a merger in an effort to garner support for the deal.”
