Insurance Journal  Sep 8  Comment 
Alliant Insurance Services Inc. has acquired Spokane, Wash.-based Farmin, Rothrock & Parrott. Terms of the deal were not disclosed. This marks Alliant’s fifth acquisition in the Northwest since 2014. John Richardson, president of FRP, along...
Reuters  Aug 3  Comment 
* Q2 revenue $206.6 million versus I/B/E/S view $206.6 million
Benzinga  Jun 9  Comment 
David Tawil is the co-founder of Maglan Capital and was a guest on Thursday's daily edition of Benzinga's Premarket Prep. His fund recently acquired a 7.6 percent stake in FairPoint Communications Inc (NASDAQ: FRP), a telecommunication company...


Fairpoint is the eighth largest wireline telephone company in the United States, based on number of access lines as of September 30, 2008. It operates in 18 states with approximately 1.8 million access line equivalents (including voice access lines and high-speed data lines, which include DSL, fiber-to-the-premises, wireless broadband and cable modem) as of September 30, 2008.[1] It offers an array of services, including local and long distance voice, data, Internet and broadband product offerings to residential and business customers, primarily in northern New England.

Trends and Forces

Limited Competition

Fairpoint is one of a number of rural telecom carriers that operate primarily in markets exempt from direct wireline competition by federal law. While these rural local exchange carriers (RLECs) still face modest competition, generally coming from wireless carriers offering large buckets of minutes, customer retention has been stronger, and their total access-line counts have held up better than those of their Baby Bell brethren.

Line Substitution

RLECs have come under pressure as consumers swap traditional phone lines for wireless substitutes. Analysts have questioned whether these increased access line losses will affect the sustainability of revenue and free cash flow for RLECs. Additionally, extra competition has come in the form of cable companies that offer triple-play packages including voice services.

Industry Consolidation

Industry consolidation continues despite tough economic conditions - ex. CenturyTel's $11.6 billion offer for Embarq on Oct. 27, 2008.

Previously, Fairpoint purchased the northern New England operations of Verizon's wireline business. That transaction (estimated to add 1.5 million access lines, 180,000 DSL customers and 600,00 long distance telephone customers) closed on March 31, 2008.


In a RLEC industry comparison, Stifel Nicolaus suggests EBITDA per access line is appropriate. [2]


Other RLECs


  1. http://www.sec.gov/Archives/edgar/data/1062613/000104746908011758/a2188918z10-q.htm 2008 Q3 10-q, page 32
  2. http://www.telecomassn.org/conferences/2004/summer/2008StifelRLECMonitor.pdf
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