The telecommunications industry was the true darling of the Internet boom. Most investors looking at the industry felt that growth in data traffic was unstoppable and would lift the fortunes of both telecom hardware companies and telecom service providers indefinitely. With the benefit of hindsight, we understand that so much cable was laid and so much hardware was shipped to service providers, that the all segments of the market became glutted.

One of the sectors leading the way in this revival is the Wireless segment. While penetration rates in the U.S. are high, service providers are increasing average revenue per subscriber as more customers are using their wireless devices for data services such as e-mail and Internet browsing, as well as audio and video services. As wireless traffic steadily increases, the wireless tower industry has shown particular vigor, especially given the difficulty of siting new towers. The survivors in the traditional local and long distance wireline services sectors have consolidated, though both sectors now face the threat of erosion from Voice over Internet Protocol (VoIP). The hardware segment is finally showing signs of life, in both private and public networking.

The financing needs of telecommunications companies vary widely depending on segment. Startup companies seek growth capital, which is available to companies with a well-honed strategy who can present their story well. Services firms which have reached critical mass have access to private equity, which appreciates the recurring revenue model. Telecom companies may also have access to certain debt financing, including asset-based or working capital debt and acquisition financing.

Mergers and acquisitions represent an ongoing opportunity for telecom firms. Some firms are ready to realize a return on years of financial investment and sweat equity. Others are looking to acquire other companies to build a larger entity that will become a long-term formidable competitor in their sector. Westbury serves the needs of both M & A buyers and sellers.