Cogent CEO says AT&T, CenturyLink, and Windstream deals won't materially change the telecom industry

iStockPhoto.com

Cogent's CEO Dave Schaeffer says that while the company continues to watch out for potential deals it could make, the service provider remains unfazed by the recent spate of acquisitions that have been announced in recent weeks.

In less than a month, three large service provider deals emerged: AT&T’s proposed acquisition of Time Warner; CenturyLink’s tie-up with Level 3; and Windstream’s deal for EarthLink.

Each of these service providers are coming together for different reasons. AT&T’s pending deal with Time Warner is about diversifying their holdings, while the CenturyLink/Level 3 and Windstream/EarthLink deals are about cost cutting.

Schaeffer told FierceTelecom that he does not think any of these deals, when they eventually are completed, will have a major effect on the telecom industry as a whole.

RELATEDCogent exploring M&A opportunities, but pricing and returns aren't right

“In terms of changing the industry, I just don’t think these are material transactions,” Schaeffer said. “Internet is so deflationary to the whole infrastructure industry that a lot of these companies are struggling.”

By providing cheap Ethernet-based internet access services, Schaeffer said Cogent isn’t feeling a need to spend money to alter its service portfolio.

“Most of the companies have pinned their hopes on things like MPLS or SD-WAN and increasingly a dumb pipe, meaning the internet is all the customer needs,” Schaeffer said. “I think we’re in a good spot in that we sell the right product at the best price point and I think that keeps us immune from some of the pressures that others are feeling.”