Warwick Valley Telephone (Nasdaq: WWVY), like many independent telcos, for much of its existence did nothing more than provide good old' PSTN voice service, but its recent acquisition of Alteva is changing all of that once again.
Much like its acquisition of the former USA Datanet in 2009, the acquisition of Alteva, a provider of cloud services and VoIP, is also transformational.
It is transformational because WVT, like a number of its larger independent ILEC counterparts--namely CenturyLink (NYSE: CTL), TDS Telecom (NYSE: TDS), and Windstream (Nasdaq: WIN)--realize they need to build a stronger set of business service capabilities to offset ongoing voice line losses. And while WVT obviously trails these service providers in terms of size, the need to compete with a growing set of cable competitors offering business services is no less pressing.
By purchasing Alteva, WVT instantly expands its business service portfolio with a set of VoIP services and cloud services it can take to area businesses in both its ILEC and CLEC territories.
When the acquisition is complete, WVT will combine Alteva with its USA Datanet business to create an even larger CLEC unit targeting business opportunities. In addition to gaining the cloud and VoIP capabilities, WVT gains Alteva's well established sales and marketing channel with direct and agent sales maintaining national coverage. Having these channels in place will obviously help WVT gain a foot in the door at new business accounts that maybe aren't as familiar with WVT's business capabilities.
Having these capabilities in house, explained Duane W. Albro, President and CEO of Warwick Valley Telephone Company is that they will help them "better capitalize on the growth that both service providers had been experiencing independently in the fast growing market for UC and hosted applications for business and enterprise customers."
Change is nothing new for WVT, however.
In the mid-1990s, the service provider began to emerge from its ILEC shell when they branched out as a CLEC in New Jersey. Then, in 2002 the service provider began providing video services over its copper lines via an early version of VDSL.
Arguably, WVT's biggest change came in 2009 when it purchased USA Datanet. With USA Datanet, WVT instantly gained a broader set of global network capabilities.
The message for WVT and all independent ILECs is that while change can be painful, it's something that they will inevitably have to do if they don't want to be bought out by a larger competitor and become a footnote in telecom's history books.--Sean