Tuesday, December 21, 2010
EarthLink acquires major fiber optic cable networks
In a major acquisition, telecommunications company EarthLink purchased One Communications for $370 million. According to RocNow.com, One Communications had struggled with debt and landing customer acquisition. As part of the purchase, the Georgia-based EarthLink will pay $285 million of One Communications’ debt.
One Communications is a Boston, Massachusetts-based telecom company. It was created in 2006 with the merger of three telecom companies and employs 1,500 people.
Additionally, EarthLink acquired One Communications’ fiber optic cable network. The network provides broadband services to cities, such as Boston, Washington D.C. and New York.
EarthLink CEO Rolla Huff called the acquisition “a significant development in further transforming EarthLink into one of the largest [IP] services companies in the U.S.”
“We will now have a fiber-based IP network that covers a substantial portion of the key business markets across the eastern half of the United States, as well as substantial revenue … in our strategic line of business,” he added. "We want to put together companies that have attractive fiber and IP infrastructure at their core, and that have current real cash flow, even if they have revenue streams that are declining."
The purchase comes on the heels of another major business move by EarthLink. In early December, the company purchased telecom company Deltcom for $524 million. Much like the deal with One Communications, EarthLink took on $325 million of DeltaCom’s debt while adding another $199 million in cash.
Deltacom has fiber optic networks throughout the southeastern United States. The deal gave EarthLink 32,000 new small- and medium-size business clients.
Combined, the two deals expanded the length of EarthLink’s fiber optic network to 28,000 miles with rings providing access to 68 major metropolitan areas.
Whether through purchases or by construction, several telecom companies have expanded their fiber optic networks. Time Warner recently laid more than 361,000 miles of fiber optic cable - a project that cost $120 million - in southern California. Telecom company AboveNet also expanded, adding short, low-latency routes in the Seattle area. The routes stretch from downtown Seattle to the Sabey Data Center Complex in Tukwila, Washington, and include connections to the American Life data center.