CLEC TelePacific Acquires MegaPath's Fixed Wireless Business


Financial terms were not disclosed, but the deal is an all-cash purchase of capital stock, according to a statement from TelePacific. With the move, TelePacific, which bills itself as California's largest competitive local exchange carrier (CLEC) providing services to SMBs, expands its SMB service provider footprint into the fixed wireless market, and makes it a more formidable regional challenger to AT&T, Verizon and other rivals in parts of the Western U.S.

"Covad Wireless is an established innovator in fixed wireless broadband delivery with demonstrated managerial and operational excellence," said Dick Jalkut, president and CEO of TelePacific, in a statement. "Benefits to new and existing customers will be twofold: expanded fixed wireless services offerings and the expertise of the entire Covad Wireless customers."

In September MegaPath completed a three-way merger with Covad and Speakeasy, now collectively known as MegaPath and part of an ongoing wave of M&A moves in the telecom service provider space.

In a statement, MegaPath Chairman and CEO D. Craig Young acknowledged that the Covad Wireless piece of the business wasn't a priority following the merger, and that its sale to TelePacific is better for customers.

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"Following our merger with Covad and Speakeasy, MegaPath is continuing to refine our business with a focus on providing nationwide access, security and voice services," Young said. "As a regional offering, Covad Wireless fell outside of our strategic focus, and this agreement ensures that those customers are properly supported."

TelePacific will assume operations responsibility for Covad Wireless customers following the close of the deal, which is expected to happen by the second quarter of 2011.

TelePacific earlier this week debuted mobile wireless services, enabling customers to add mobile to their TelePacific services accounts with single point of contact and single billing for all their voice, data and mobile wireless services. In October, the CLEC completed its acquisition of the SMB customer base and some networking assets of O1 Communications, including O1's data center.