Greg Mycio, director of research with New Paradigm Resources Group Inc., agrees.
"I think the best potential payoff for the investors and for the company is consolidation," he
...Mycio says Qwest and Level 3 would gain a deeper network in metropolitan areas through the acquisition of Allegiance, but he believes Allegiance rival XO is the best positioned to take advantage of a deal.
Both companies are large nationwide carriers competing for business customers with the regional Bell operating companies and other phone providers.Qwest
, on the other hand, is a Bell company; and Level 3 long has called itself a carrier's carrier, selling its services to phone companies, ISPs and other communications providers, rather than directly to U.S. corporations.
"They [XO] are going to know the business better," Mycio
"We all know there are ego issues," Mycio
says."If there weren't, there would have been a lot more consolidation in the industry in the last year, two years."