Over the past 10 years the wireless industry has witnessed dozens of mergers or acquisitions that has whittled down a number of industry segments and opened up others. This consolidation is most telling in the mobile carrier space where at one time there were six carriers that were considered nationwide operators, more than 20 good-sized regional outfits and hundreds of local operators vying for customer attention.
The landscape today shows a more constricted space with four nationwide operators, a handful of regional players and still hundreds of local operators, but their numbers have retreated from their one-time highs.
Many would note that this consolidation is only natural for a fast-growing industry and that it has helped push the rollout of advanced wireless technologies and strengthened service offerings for consumers. Others may see that differently noting that the fewer players equals fewer choices for consumers.
Regardless of where you fall in this argument, one company that has been in the center of a number of these deals is RBC Daniels, which according to the company has been involved in more than $100 billion worth of M&A activities. According to Thomson-Reuters, RBC Daniels and its RBC Capital Markets Corp. parent company was the most active M&A advisors to the North American cable, telecommunications and media sectors between 2000 and 2007, also known as the golden-age of wireless consolidation.
(RBC Daniels was formed in early 2007 following RBC Capital Markets’ acquisition of Daniels & Associates L.P. Daniels was originally founded by cable television pioneer Bill Daniels in 1958.)
RBC Daniels, and prior to that Daniels & Associates, has been involved in a number of M&A deals in the mobile space, specifically surrounding small and mid-sized operators that have sold portions or all of their operations to larger firms. One of its most recent deals was advising satellite communications provider Inmarsat plc on its $110 million acquisition of Segovia Inc. late last year. Some of RBC Daniels’ other recent deals include:
–Acting as exclusive financial advisor to AT&T Mobility for the sale of 235 cellular towers to Global Tower Partners in 2009 as well as a previous sell of 549 towers to GTP in 2007.
–Acting as financial advisor to Open Range Communications as it secured $374 million in funding to support the roll out of wireless broadband services to rural communities, as well as the formation of a spectrum partnership with satellite communications provider Globalstar Inc.
–Acting as an advisor to Hargray Communications Group Inc. on its $30 million deal to sell its wireless operations to Leap Wireless International Inc.’s Cricket Communications Inc. subsidiary.
–Serving as financial advisor to Ramcell in its deal to sell its wireless assets to Verizon Wireless.
–Representing Triad Holdings I L.L.C. in its sale of spectrum licenses to Chickasaw Wireless.
While the market for M&A activities has slowed from the hurried pace seen from the mid-90s to mid-00s, RBC Daniels said it expects that lull to be short lived. The company noted that there are still a number of wireless carriers in the market that are looking to merger their operations with larger providers and that there is still a lot of spectrum sitting licenses that have yet to find their final home.
“There is still a lot of activity in the space,” said Brad Busse, president and COO of RBC Daniels, in an interview at the company’s Denver offices. Busse cited the emerging mobile broadband space as an active market as well as the secondary market for 700 MHz spectrum licenses and potential for activity in the ATC spectrum market space.
In addition to working with wireless carriers, RBC Daniels is also remaining busy with tower companies and is looking closer at backhaul requirements needed to handle robust wireless service offerings. And while the company has a comfortable position in traditional mobile services, the firm is taking a look at some of the new mobile content and application segments that are beginning to gain traction.
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