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“So why the reversal?” Hjembo asks. Apparently,
competition has been too stiff from public cloud pro-
viders such as Amazon and Microsoft. The analyst con-
tinued, “For some carriers it has been just too difficult
to make headway in this particular business. So it will
be interesting in the coming months to see who pur-
chases Verizon’s assets, whether it is one entity or sev-
eral, and who follows suit in making a similar move. We
may be witnessing a narrowing of focus among some
carriers and a return to core business.”
Fusion Acquires Cloud
Services Provider Fidelity
Cloud services provider Fusion has acquired Fidelity
Voice and Data, a Beachwood, Ohio-based provider of cloud
voice, cloud connectivity, security, data center and cloud
storage services to approximately 2,000 small, medium
and large business customers in the Midwest and through-
out the U.S. Fusion expects to complete the integration of
Fidelity by the end of the second quarter of 2016.
Total consideration in the transaction, which closed on
December 8, 2015, was $30 million consisting of $28.5
million in cash and $1.5 million in Fusion common stock.
The cash portion of the consideration was funded via Fu-
sion’s existing bank credit facility and its cash balances.
The transaction is immediately accretive to Fusion, with
substantial opportunity for cost savings through elimination
of redundancies, said the company. The purchase price rep-
resents a valuation of 5x pro forma adjusted EBITDA.
The Fidelity acquisition contributes to Fusion a rev-
enue base of approximately $18 million per year, more
than 90 percent of which consists of monthly recurring
revenues (MRR), growing nearly 10 percent organically
through the first nine months of 2015. It adds approxi-
mately $6 million in annual pro forma adjusted EBITDA
after giving effect to projected cost synergies and brings
a customer base of approximately 2,000 businesses
with an average monthly revenue per customer
(ARPU) of approximately $750 and a low churn
rate of approximately 0.5 percent per month.
“The acquisition of Fidelity brings Fusion closer
to its goal of building significant scale in the frag-
mented but rapidly growing cloud services market,”
said Matthew Rosen, Fusion’s CEO. “Fidelity will
also contribute to Fusion’s organic growth, acceler-
ating Fusion’s progress over the last year in expand-
ing its business. We intend to drive additional or-
ganic growth by cross-selling and up-selling Fusion’s
comprehensive suite of integrated cloud solutions
and leveraging the benefits of Fusion’s nationwide
network to Fidelity’s current customer base.”
“Fidelity’s strong business profile means that
the acquisition is immediately accretive to Fu-
sion,” said Don Hutchins, Fusion’s president and chief
operating officer. “We have also identified a range of
specific cost savings opportunities, which we expect
to achieve as we integrate Fidelity into Fusion’s plat-
form, just as we have accomplished with Fusion’s four
previous acquisitions.”
NetCarrier Inks Deal
with VoIP Supply
NetCarrier has entered into a strategic partner-
ship with Buffalo, N.Y.-based VoIP Supply to distribute
nCloud services nationwide. VoIP Supply is a global
reseller of voice over IP equipment, with more than
125,000 customers worldwide since 2002.
“VoIP Supply is a very unique partner for us because
of the multi-faceted approach that they take to market-
ing our services,” said Bruce Wirt, NetCarrier’s vice
president of channel sales. “Not only do they take the
traditional sub-agent distribution approach, but they
drive a tremendous amount of business through the
CloudSpan Marketplace on their Web site.”
“VoIP Supply is excited to add NetCarrier’s nCloud
hosted PBX to our CloudSpan Marketplace,” said Ben
Sayers, CEO of VoIP Supply. “Their unique platform of-
fers great value by providing onsite installation and
training to our customers and resellers.”
NetCarrier’s nCloud technology suite includes tradi-
tional and cloud-based voice and video services and is
only available through the agent channel.
ChannelEyes Announces
Partner Sales Workflow Tool
Partner enablement company ChannelEyes announced
the launch of its OPTYX partner sales workflow tool built
for channel account managers. The company describes
Source: TeleGeography
Colocation Capacity by Carrier and Region (million sq ft)
6
5
4
3
2
1
0
Gross Space (million sq ft)
CenturyLink (?)
Verizon Terremark
(for sale)
TierPoint (includes
Windstream)
AT&T (?)
US Europe LatAm Asia
Source: Accenture
Impact of security concerns on consumer attitude
towards loT devices and systems
24%
decided o postpo e
purchasing an IoT
device
18%
d cided to quit or terminate
an loT device or service till
they were assured of safety
21%
are not too concerned
about: security breaches
such as hacker attacks
37%
decided to be more
cautious when using
l T d vices and services
Source: Accenture
Consumers who intend to buy these
device in the n xt year (2016)
% point movement over last year (2015)
Smartphone
TV
Lapt p computer
Tablet
S artwatch
Wearable fitness monitor
Wearable health device
Home connected surveillance camera
In Vehicle automation system
In vehicle entertainment system
Smarthome thermostat
Home 3D printer
Personal drone
48%
30%
30%
29%
13%
13%
11%
11%
10%
10%
9%
8%
7%
-6%
-8%
-6%
-9%
1%
1%
1%
1%
0%
0%
0%
1%
1%
Source: Deloitte University Press; company reports
Verizon Performance, 1999-2013, $ Billion
$96
$120
$39
$6
$9
$43
1999 2013
Revenues
1999 2013
EBITDA
E
150
125
100
75
50
25
0
Wireless
Wireline
$79
$17
$81
$39
$33
$34
Source: Trading Economics
U.S. Telecommunications Revenue
1974
1981
1988
1955
Source:
Telco2research.comCable Business Servic
Competitors’ Revenue
Comcast Business
TWC Business
Charter Business
Mediacom Business
L(3) Enterprise proforma
$10,000
$8,000
$6,000
$4,000
$2,000
$-
Q1 2012
Millions
14
Channel
Vision
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January - February 2016