CHICAGO--(BUSINESS WIRE)--Link to Fitch Ratings' Report: U.S. Telecom and Cable Stats Quarterly (First-Quarter 2014)
Level 3 Communications, Inc.'s (LVLT) merger with TW Telecom, Inc. increases LVLT's scale and focus on high margin enterprise account revenues while increasing the company's overall competitive position and ability to capture incremental market share, according to Fitch Ratings' 'U.S. Telecom and Cable Stats Quarterly' .
LVLT remains committed to operate within its 3x to 5x net leverage target. The enhanced scale and ability to generate meaningful free cash flow (FCF) resulting from the transaction reinforces Fitch's expectation of further strengthening of LVLT's credit profile.
Sprint Corp. and T-Mobile USA are reportedly nearing a transaction in which Sprint will acquire T-Mobile for approximately $32 billion. Fitch believes a Sprint/T-Mobile union would improve the network densification required for a higher speed wireless offering, but would also likely add further integration challenges to Sprint's already lengthy network migration plans. Regulatory approval remains a substantial hurdle for this potential transaction and predicting the outcome of a regulatory review is difficult given the current regulatory climate. However, regulatory approval of the merger would likely require substantial concessions and related divestitures to address public interest concerns and antitrust issues.
Fitch's 'U.S. Telecom and Cable Stats Quarterly' provides a summary of operating performance, credit metrics, and liquidity positions of the companies in the telecommunications sector of Fitch's rating universe over the past four years, as well as key credit strengths and concerns as of the end of 1Q'14.
Additional information is available at 'www.fitchratings.com'.