US telco FairPoint Communications is considering M&A options as it grapples with intense competition in a consolidating sector, according to CEO Paul Sunu.
Speaking on a conference call with investors on the company’s Q1 2015 results, Sunu said…
US telco FairPoint Communications is considering M&A options as it grapples with intense competition in a consolidating sector, according to CEO Paul Sunu.
Speaking on a conference call with investors on the company’s Q1 2015 results, Sunu said FairPoint could be a buyer or a seller in any M&A deal as it revises its overall strategy. However, he noted that efforts in this respect “are at very early stages” and that further exploration of the company’s options will be done “carefully and methodically”.
The North Carolina-based company reported a loss of US$45.2m for the quarter, compared with a loss of US$43.6m in Q1 2014. Overall company revenues were down US$3m from Q1 2014 to US$214m, reflecting revenue declines in voice, data and internet services. Revenue for Ethernet services, however, increased.
Sunu said the impact of an employee strike in New England and the harsh winter also affected the results, but noted that the company remains focused on improving services, managing costs and striving to drive free cash flow.
“Our incumbent work force is back in place and our trouble loads have been reduced to some of the lowest levels since 2008 as we continue to implement improvements in our operations,” he said.
Last month, FairPoint’s third-largest shareholder, Maglan Capital, called on the telco to launch an “aggressive sale” of about half its business, saying this could raise US$500m. Maglan, which has a 9% stake in the operator, has questioned the way the board is running the company and presented a three-point plan to turn it around.
FairPoint filed for bankruptcy in 2009 and emerged in 2011.
It offers broadband, local and long-distance phone, television and other high-capacity data services to customers across 17 US states.
