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A New Dimension

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There is no such thing as a final frontier. Even if mankind lives to explore all we think there is to explore, we'll never be sure there isn't something smaller, bigger or of a different dimension. And after the day of speeches we heard from the floor of the United Nations yesterday, it's hard to imagine we'll ever get that chance.

One example of a continually evolving frontier is the phone company Citizens Communications bought in 2001 for about $3.5 billion: Frontier Telephone. Frontier's coverage area made Citizens the second biggest dog in the yard of Orange County at the time--the less famous Orange County in New York. Citizens became one of the nation's largest rural telephone companies with 2.5 million access lines in 24 states.

One would have expected, given the "to the victor go the spoils" attitude of modern M&A warfare, that the Frontier name would have faded into history. One would have been wrong. Citizens gave all of its properties the Frontier brand.

This week, Citizens said it will acquire Pennsylvania-based Commonwealth Telephone for $1.16 billion, creating what it says will be the seventh-largest phone company in the U.S. It's understandable that the Frontier brand will also survive this acquisition. Who but those living in one even remember what a commonwealth is? To forestall any doubt, Citizens CEO Maggie Wilderotter said directly she will rebrand the entire operations to Frontier as soon as possible.

Given the expectations for consolidation in the rural telecom space, this will hardly be the final frontier for Frontier. Other large independent local exchange carriers such as Embarq and Windstream--spinoffs of Sprint and Alltel, respectively--have stated their intentions to grow by acquisition. And even smaller rural telcos are attempting to expand by creating CLEC arms to reach outside their markets.

This all makes for what will be an interesting battle for leadership in the independent market. But even more interesting will be the reaction of all those software vendors who stayed away from the rural market because it was too small, when it turns out the best chance some of them may have had to break into the Tier 1 market they covet so much would have been to be a part of the back office of a smooth-running rural telco when it was acquired by one of the growing number of Tier 1 independent telcos--a new dimension in the telecom space.

E-mail me at tmcelligott@prismb2b.com.

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