KeyOn Communications Holdings, Inc., a provider of wireless broadband, satellite video and VoIP services in the United States, has acquired assets of the company operating as SkyWi, Inc., in order to complement its network footprint in North Central Texas.
SkyWi, Inc. is a Fort Worth, Texas-based provider of wireless broadband Internet services to residential, business, and institutional customers.
According to KeyOn officials, the company closed this first acquisition under its Rural UniFi program, which is an initiative designed to rapidly expand the company’s subscriber base and network footprint through acquisitions.
Jonathan Snyder, CEO of KeyOn, said that SkyWi is a great example of how KeyOn is able to derive synergies from adjacent networks.
“SkyWi’s subscriber base and revenues will partially offset losses in those areas we experienced due to the market environment in 2009,” Snyder said. “Management anticipates that SkyWi will contribute over $300,000 of revenues and approximately $150,000 in EBITDA in 2010.”
What’s more, KeyOn offers its wireless broadband, satellite and VoIP services primarily to underserved markets - with populations generally less than 50,000. And, its broadband services along with itsVoIP and satellite video services are offered to both residential and business subscribers across 11 Western and Midwestern states.
Generally, rural markets are often served by independent wireless broadband operators. Without available capital, these independent wireless broadband companies can experience growth challenges as well as inefficient cost structures that are associated with smaller customer bases that are present in rural areas.
This has resulted in lack of available broadband options in rural areas. It is estimated that rural markets lag their urban and suburban counterparts by more than 20 percent in terms of home broadband penetration.
In order to overcome such growth challenges, KeyOn started a national network initiative in September 2009, Rural UniFi program, which will provide opportunity to create value for the wireless broadband business by combining the strengths of different wireless broadband companies via acquisitions.
According to KeyOn officials, its Rural UniFi program is a complete acquisition initiative that facilitates in expanding the company’s subscriber base and network footprint via acquisitions. With the help of this program, the company will be ideally positioned to acquire and integrate wireless broadband companies covering areas that are contiguous to or near rural areas.
The recent acquisition of SkyWi will provide the company with an ability to attract significant capital and top-tier technology partners to rural communities. This will in turn accelerate the adoption of rural broadband as well as expedite the delivery of next-generation services, said Snyder.
Previously, KeyOn integrated four acquisitions successfully resulting in growth of its subscriber base and revenues while expanding EBITDA margins, said officials.
“As we complete the first acquisition under the Rural UniFi program, we have begun executing our vision to create a sizable, next-generation rural communications company,” Snyder said. “Operating in eleven states provides us with the geographic reach that exposes us to many opportunities where we can leverage our existing network footprint and field personnel to generate cost-savings and subscriber growth.”
So far, the company has expanded its network footprint to reach approximately 50,000 square miles and cover nearly 2,500,000 people as well as small-to-medium businesses – via a combination of organic growth and acquisitions, said officials. Jayashree Adkoli is a contributing editor for TMCnet. To read more of Jayashree's articles, please visit her columnist page.
Edited by Kelly McGuire