Wireless Consolidation: Is NJ's Centennial Next?


Verizon Wireless’ $2.67 billion purchase of Rural Cellular Corporation, announced this morning, proves that telco consolidation remains alive and well. Big carriers continue to snap up smaller wireless companies for their subscribers — Rural Cellular has 716,000 customers — and roaming revenue. In June, AT&T paid $2.8 billion for Dobson Communications, which had 1.7 million subs.

Is Wall, N.J.-based Centennial Communications next on the block? At the end of February, Centennial had about 1 million subs in six states and Puerto Rico. In that period, the carrier lost $1.3 million on $229.1 million of revenue. Its customers spent about $66 per month on service, about $16 more than AT&T and Verizon pull monthly, but its churn, which measures the percentage of customers who leave the company every month, was a bit high at 2.4%.

Centennial mostly operates using the GSM network technology, meaning it would best fit with AT&T or T-Mobile’s networks, but don’t necessarily count out CDMA bidders like Verizon, Sprint or Alltel. Investors certainly seem to think someone is going to buy it: Since the company’s 52-week low last fall, the stock has more than doubled, giving it a $1.1 billion market cap.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.