Level 3 to Acquire TW Telecom for $5.7B

Level 3 Communications said on Monday that it had agreed to buy TW Telecom, a provider of business Internet connections, for about $5.68 billion, reports the NY Times.

Level 3 is one of the country’s biggest providers of back-end Internet services. The company’s network of fiber optic cables is used by the likes of Google and Netflix. In 2011, Level 3 acquired Global Crossing for a global reach.

TW Telecom, based in Lone Tree, Colo., will give Level 3 a significant provider of local Internet access services and online-based voice calling to businesses.

Level 3’s offer was worth about $40.86 a share, 12 percent above TW Telecom’s closing price on Friday. In addition, Level 3 will also acquire about $1.6 billion in debt.

Level3 provides core transport, IP, voice, video, and content delivery for most of the medium to large Internet carriers in North America, Latin America, Europe, and selected cities in Asia.

It is also the largest competitive local exchange carrier (CLEC) and the 2nd largest provider of fiber optic internet access (based on coverage area) in the United States, after Verizon.

Philadelphia-based NetCarrier Telecom, a privately held company, is the 3rd largest fiber provider in the US, according to Broadband Now.

Today XO and Towerstream, dominate fixed wireless backhaul. XO Communications delivers services through a mix of fiber-based Ethernet and Fixed Broadband Wireless. Towerstream recently announced a partnership with Alcatel-Lucent for one-stop deployment of Small Cell infrastructure.

Back in the late 1990s, Teligent, Winstar and Advanced Radio Technologies cost investors almost $10 billion in losses building fixed wireless networks in the 18-28 GHz band.

The telecom industry is currently in a merger frenzy. Comcast has agreed to buy Time Warner Cable, while AT&T is seeking to take over DirecTV and Sprint and T-Mobile USA are hoping to merge as well.

In July 2013 Level 3 was accused of wiretapping the German Internet Exchange Point for the NSA, and a few months later, was accused of tapping connections between Google and Yahoo data centers.

Posted by Sam Churchill on .

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