Friday, February 4, 2005

Mpower Creates Wholesale Division

Mpower Communications has formed a new Wholesale division that aims to leverage its acquisition of ICG's California wholesale customer base and statewide SONET fiber network, in addition to Mpower's own deep and dense facilities-based network of switches and nearly 300 collocation facilities. With the acquisition of ICG's California business earlier this year, Mpower is already wholesale provider to many of the largest IXCs, CLECs and ISPs in the country.

The new wholesale division will be led by Russ Shipley, formerly New Technology Officer for Mpower. Previously, Shipley has held senior positions at Global Crossing and Frontier Communications. His most recent position at Global Crossing was Senior Vice President-Global Transport Network Operations. While at Frontier, Shipley led the planning, engineering and construction of the 20,000-route mile nationwide fiber optics network shared by Frontier and Qwest.

  • In October 2004, Mpower Communications will acquire ICG Communications' network assets and customers in California for $13.5 million in stock. The deal includes ICG's California retail and wholesale customers; a 1,412 route mile state-wide self-healing DWDM and SONET-based fiber ring connecting San Jose, San Francisco, Oakland, Sacramento, Stockton, Fresno, Bakersfield, San Diego, Anaheim and Los Angeles; 915 route miles of fully-survivable metropolitan SONET-based fiber rings in San Jose, San Francisco, Oakland, Sacramento, San Diego and Los Angeles which connect 128 commercial buildings, 33 of Mpower's existing collocations and 11 ICG collocations that will be added to the Mpower footprint. The acquisition is expected to contribute in excess of $30 million in revenue and $8-$10 million of operating income (excluding expenses related to depreciation and amortization of the acquired assets) in 2006.

    In connection with the acquisition, Mpower also announced that telecom investment funds Columbia Capital and M/C Venture Partners, through their ownership of ICG, will invest $2.5 million in cash for 1,988,894 shares of Mpower Holding's common stock.

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