After a few weeks of seeking a suitor, Embarq, the landline unit spun off from Sprint in 2006, has enticed CenturyTel into paying $5.8 billion in stock, and assuming $5.8 billion in debt for the nation’s fourth largest local exchange carrier.

[qi:062] Times are tough in the landline business, and when times get tough, the tough go shopping. After a few weeks of seeking a suitor, Embarq, the landline unit spun off from Sprint in 2006, has enticed CenturyTel into paying $5.8 billion in stock and assuming $5.8 billion in debt for the nation’s fourth largest local exchange carrier.

CenturyTel is the seventh largest local exchange carrier (LEC) in the U.S., based on access lines in service (2.1 million ) and high-speed Internet connections deployed (more than 600,000). The combined Embarq-CenturyTel would operate in 33 states and have about 8 million telephone access lines, 2 million high-speed Internet customers and about 400,000 video subscribers.

As competition with cable companies and new wireless broadband products increases, smaller, rural telcos are seeking to buy scale in order to compete. In February, the nation’s fifth largest LEC, Windstream, purchased a tiny North Carolina carrier and had been a suspected suitor for Embarq. Given the erosion of their core business and the grim credit markets, it’s likely that buyers with strong stock or a little cash could pay less of a premium on assets that give them the ability to expand without building out their own infrastrucutre. TDS Telecom and Frontier Communications are probably eyeing their own balance sheets and opportunities.

You’re subscribed! If you like, you can update your settings

  1. I have worked for Embarq (aka Sprint, aka Sprint Mid-Atlantic Telecome, aka Carolina Telephone and Telegraph)for 13 years and during that time I have seen “THEM” come and seen “THEM” go….all I can say is I hope this company CenturyTel wants to be a “REAL” telephone company instead of making “US” the local phone company it’s cash cow….like Sprint and Embarq have done….Use to when you worked for the “local telephone company” it was a “good” job you could be proud of….Now it is not that way…..Last week I got a notice along with all the other 18,000 employees (this count was on Dec 31, 2007 before they laid several thousand off)or however many of us are left after cutting us to the bare bone to set us up for this sale….that Embarq (which is a self insured company….meaning we are the insurance company) is going up $200.00 a month on my insurance premiums and $100.00 a month on my two types of insulin…..what a great company to work for!!!! Good luck CenturyTel with turning “US” around after we have been raped of all of our assets by not one set but two sets of plunders……TakeaStand TERESA

  2. I too work for Embarq. All of the take over info as of late was pushed of as rumor and speculation by the execs to the workforce. Embarq is a company of fat cats that have sat back and watched it impload upon itself. No new business has developed and now it is said that Verizon has pulled the plug on using Embarq as a logistics provider. The consensus from the employee associate is that we have incompetent mangement that are sitting around planning how to spend their gigantic severence packages.

  3. Fifteen years ago, what is now called Embarq, was a good place to work with decent pay and benefits. Many top executives had worked their way up from the bottom. In other words, they were “telephone” people who understood and cared about our business.

    We had real leadership and we were in business together to provide reliable service. We took pride in our company we cared about our customers. Everyone was a valued team member from the janitors to the executives.

    Over the years there has been vast technological change in our business, but the biggest change of all has been the mindset of our executives. Beginning with Bill Esrey and types like his buddy, Bernie Ebbers of WorldCom, our business has taken over by executives with a penchant for greed.

    These executives put profits ahead of people, employees and customers alike, which created a corporate culture of the “haves” and the “have-nots.” For years, hourly worker’s wages have been eroded by increased health insurance premiums as the company shifted more and more of the cost to the employees. In fact, Embarq’s hourly wage increases have not even kept pace with inflation.

    This is not the case with our executives. Their compensation exceeds their health insurance premiums and then some. Last year Dan Hesse (then Embarq CEO) raked in $273,289 while the average hourly Embarq worker was paid $30,000. The discrepancy between executive pay and hourly pay is disgraceful.

    In other words, hourly workers are taking home less and less while the executives take home more and more. The company is a mere shadow of its former self in what it provides to customers and hourly employees alike.

    Time will tell if CenturyTel executives are more fair minded, but since my department is being consolidated soon, I might not be around to know.

  4. Well to answer all of your questions it is the same down here in the south. Same stuff you are stating here is going on with CTEL as well. Good Luck to us all.

  5. Well good luck Embarq employees. Century-Tel swoops in like a knight in shining armor, touting that they are going to make things better for the employees and the customers. They are nothing but a wolf in sheeps clothing. They recently acquired MebTel/Madison River, and everything has gone downhill since. Layoffs, closures, forced overtime, strong arm tactics, anti-union, sex discrimination…that’s what you can expect. I hate to say it, but get out while the gettin’s good.

  6. Embarq employees: I am sad to hear the news of the merger. Centurytel proudly announced the merger (buyout) to their employees and today November 13, are going around the state laying of employees. Something they failed to mention. I assure you Centurytel will further rape and pillage your company. Their stock price rose with a set of layoffs several years ago and all the top fat cats sold their stock at a profit. Don’t just walk, RUN.

  7. My father works for Embarq and is stressing big time over this buyout. It seems hard work, dedication, long, thankless hours of being on call and answering pages in the middle of the night get you absolutley NOWHERE. Tell me top dogs…what will you do when there’s no one left to do the mundane tasks below you?

  8. Telco Startup Raises $100M for Northeast Buildout – GigaOM Tuesday, November 25, 2008

    [...] Mass., and Poughkeepsie, N.Y. But if it can keep up the growth and profits, Pocket might make it an eventual target for the regional consolidation that periodically grips the communications [...]

  9. Hey does anyone know how CENTEL handles it’s logistics. Who does it for them? Rumor is that they will sell off the Embarq logistics.

  10. I too work for Embarq. We got the notice we are being laid off next year. Used to love my job but with each sellout it gets worse. Customers blame us for not knowing how to handle their complaints when it is management fault for not wanting to talk to customers. We only do what we are told to do but customers get mad and one told me he hoped we had a fire so he would be rid of incompetent people like me. I face losing years of benefits and paying more for my insurance than ever before while the CEO gets his hefty rewards.

Comments have been disabled for this post