QUOTE AND NEWS
Motley Fool  Dec 5  Comment 
Consolidated Communications prepares to acquire FairPoint.
Benzinga  Dec 5  Comment 
  FairPoint Communications Inc (NASDAQ: FRP) surged 12.4 percent to $19.10. The volume of FairPoint Communications shares traded was 2256 percent higher than normal. Consolidated Communications Holdings Inc (NASDAQ: CNSL) announced plans...
Benzinga  Dec 5  Comment 
    Following the market opening Monday, the Dow traded up 0.48 percent to 19,262.56 while the NASDAQ climbed 0.92 percent to 5,304.16. The S&P also rose, gaining 0.69 percent to 2,207.03. Leading and Lagging Sectors Monday...
Reuters  Dec 5  Comment 
Consolidated Communications Holdings Inc said on Monday it would buy broadband service provider FairPoint Communications Inc in an all-stock deal valued at $1.5 billion, including debt.
Financial Times  Dec 2  Comment 
FRP Advisory is investigating debt owed by the failed department store chain to Arcadia Group




 
TOP CONTRIBUTORS


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.

Valuation

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

Competition

Other RLECs




References

  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
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki