Usurf buys SunWest

Denver, Colo.,-based broadband wireless provider Usurf America said today it will acquire SunWest Communications, a facilities-based CLEC in Colorado Springs, for an undisclosed amount of cash and stock.

The companies hope to more closely bundle Usurf’s video and broadband wireless offerings with SunWest’s switched voice and DSL offerings to the approximately 9000 customers the combined company will have. Usurf has about 1500 customers, most of which are in the Denver metropolitan market, and SunWest has about 7500 customers and 10,000 access lines, most of which are in Colorado Springs, according to Usurf. The combined company will focus mainly on the Front Range area of Colorado, spanning from Fort Collins to Pueblo.

SunWest will be a wholly owned subsidiary of Usurf, and its services will continue to be sold under the SunWest brand.

The deal is Usurf’s second attempt to acquire a Colorado CLEC in the past year. In January 2003, Usurf announced its intention to acquire Denver-based DMJ Communications, which had less than 100 customers, but that deal fell through as unforeseen complications arose in the state regulatory process preventing Usurf from obtaining DMJ’s CLEC certification.

“We wanted to do all this a year ago,” a Usurf spokesman said.

Usurf’s relationship with SunWest goes back even further. In May 2002, SunWest began reselling Usurf’s Quick-Cell broadband wireless service to its voice and dial-up customers. Today SunWest has 600 total customers for its Internet services, most of which use DSL, while the rest use either Quick-Cell or dial-up.

“We took a lot of time evaluating this before we jumped into it,” said Ken Upcraft, executive vice president of Usurf. When Usurf established its marketing partnership with SunWest two years ago, “we really were dating at that time and seeing how the relationship went. Then we got engaged, and now we’re married.”

SunWest declared bankruptcy last year, Upcraft said, and Usurf paid $1.5 million to help it emerge from the process in December 2003.

The total integration of the company should take about six months, Upcraft said, adding, “the network side of it is already done. For the last couple months, we’ve been integrating their fiber network into ours—part of it we were using for our wireless deployment in Colorado Springs, and we already have the Denver POP tied in to the Colorado Springs switch.”

As the two companies combine, its leaders will interview SunWest’s approximately 48 employees to decide which workers will stay with the new company. “Right now, all people will stay,” Upcraft said.