NOTICE ME

When D&E Communications trumped a bid by NTELOS for Conestoga Communications last week just hours before the rest of America was about to gorge itself on turkey and stuffing, it marked the continuation of a quest by small telecom carriers to get some of the attention they deserve. And who could blame them?

Consider the following: The bid by NTELOS to buy Conestoga received a total of two press mentions and virtually no comments from Wall Street analysts. D&E’s usurping received a little more attention but nary an inch of ink from the major dailies.

The mere mention of a rumor involving any of the former Bell companies generates enough ink to drown several small villages and throws the market into a tizzy beyond its normal frenzy.

The quest for attention from analysts is one of the driving factors behind the spate of independent telco mergers. In announcing the original bid, NTELOS CEO James Quarforth said the combine company would be at a critical mass, finally, to generate some interest. More attention means easier access to the purse strings of the investment banks, which makes raising money all the more easy.

But the independents, which have for the past six months been viewed by the few analysts that follow them as the safest investment outside of certificates of deposit, should be wary. True, more attention from the New York crowd will garner easier access to cash, and there’s a certain status that goes with being tracked by the big boys. But with that access comes demands that many may not be able or willing to meet: cuts in their traditionally fat dividends, for example, and a rapid consolidation that will require painful job reductions.

Independent carriers should be careful what they wish for. They might get it.