Telecommunications service provider, Telephone and Data Systems, Inc. (TDS) has acquired MSN Communications, Inc. for $40 million. The acquisition is expected to support the company’s IT services and customer relations for its Hosted & Managed Services.
Telephone and Data Systems is expected to gain from MSN’s diverse portfolio of products and services. These include a service package involving planning to installation, and management of IT infrastructure hardware solutions procured from world standard Original Equipment Manufacturers.
Apart from MSN Communications, Telephone and Data Systems has entered into various acquisition deals that have placed it in a superior position in the genre of hosted and managed services. Acquisitions of VISI Inc. in Mar 2010, TEAM Technologies, LLC in Dec 2010, OneNeck IT Services Corporation in Jun 2011 and Vital Support Systems, LLC in Jun 2012 have helped the company in building enterprise-grade managed services. These acquisitions boosted the company’s technical capabilities by supporting data center infrastructure, hosting and cloud-based offerings provided through Host and Management Service services.
Moreover, the company acquired Baja Broadband and benefited from the latter’s expertise in high-speed broadband and voice services along with its $850 million to $900 million revenue generating capacity. The company also gained a customer base of 74,000 in video services, 6,000 in high-speed broadband and 15,000 in digital voice. As residential and commercial broadband remains largely underpenetrated in Baja’s market, the acquisition also provides Telephone and Data Systems with significant revenue opportunity.
Telephone and Data Systems’ strong results in hosted managed services, deeper penetration of its commercial services like managed IP, and rollout of broadband in rural markets as part of the broadband stimulus program will fuel growth. Moreover, the company’s Triple-Play offering that bundles voice, high-speed data and video through its partnership with Dish Network Corp. (DISH) for bundled services is also gaining traction, helping it to compete with cable TV operators.
Telephone and Data Systems, which also controls wireless service provider, United States Cellular Corp. (USM) and operates with other players like CenturyLink, Inc. (CTL) has a Zacks Rank #3 (Hold).
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