Looking back at our headlines from throughout 2008, telecom industry consolidation was a big story from the beginning of the year to the very end, but in between events took a major turn. The private equity sector's interest in telecom was strong in early 2008, as a deal to privatize GTS Central Europe announced the first week of the year had followed several other P.E. telecom deals in late 2007. Consolidation at the independent telco level seemed to be moving ahead, as FairPoint Communications's acquisition of former Verizon Communications properties headed toward the home stretch, and hot technologies drove vendor deals, such as Allot's acquisition of Esphion and Arbor Networks's buy of Ellacoya-both with deep packet inspection as a factor. In Canada, a deal to privatize Bell Canada Enterprises-another one involving P.E. firms-was inching forward. Industry observers also thought troubled Tellabs would be sold during 2008.
But, during 2008, the debt and credit markets imploded, along with many financial institutions, and though deal rumors never waned (because they just never do) actual deals seemed to become much more scarce. Expected independent telco deals failed to develop, and one of the expected buyers, Windstream Communications, cited the market conditions as the reason. Then came CenturyTel's surprising announcement that it would acquire Embarq. By late in the year, the BCE acquisition was in trouble, while Hong Kong's PCCW was seeking a controversial privatization. The BCE deal collapsed just days ago. Tellabs is still Tellabs, and an acquisition doesn't appear imminent.
There were plenty of mergers and acquisitions in telecom in 2008, of course, too many to list here. But, you have to wonder about all the deals that didn't happen or were delayed, the ones that did not collapse in dramatic public fashion, and the significance that this hiccup in telecom industry consolidation will hold for the coming year.
Four private equity firms acquired GTS Central Europe in January
Comporium acquired small rural telco Citizens Telephone
Windstream appeared to put off expected acquisition activity
CenturyTel announced it would acquire Embarq
The BCE acquisition was hoisted on a petard or some such thing
Arbor Networks acquired Ellacoya
FairPoint bought network properties, but delayed the cutover