KeyOn adds VoIP to product offerings with acquisition of CommX

KeyOn Communications, which has specialized in offering broadband and satellite video services to underserved areas across 11 Western and Midwestern states, has jumped into the $50 billion voice-over-internet protocol services market, acquiring the assets of VoIP provider CommX with plans to offer the service to its 20,000 business and residential customers.

Details of the deal were not disclosed, but KeyOn said it expected CommX would add more than $3 million in annualized revenues and will immediately "make a meaningful contribution" to EBITDA. KeyOn also said it expects to cut new-customer acquisition expenses by selling VoIP, given its existing relationship with potential customers as their broadband provider.

KeyOn Communications President and CEO Jonathan Snyder said the company would immediately begin upselling VoIP services across its networks, including its new networks funded by a $10.2 million American Recovery and Reinvestment act award, expanding sales through the addition of new wholesale partners in addition to current wholesalers.

"We are extremely excited about offering VoIP services on our own VoIP infrastructure," said Snyder. "We believe that the acquisition of these VoIP assets is a compelling vertical integration strategy that complements our wireless broadband operations, Rural UniFi acquisition program and broadband stimulus initiatives."

Plus, Snyder said, the company benefits by owning "100 percent of the margin generated from this rapidly growing voice service offering."

CommX, founded in 2002, has experienced strong annual organic growth over its history and averaged 15 percent over the 12 months ended 2010. It provides hosted VoIP services to businesses and residential customers through direct distribution as well as third-party wholesale and agent partners. The VoIP services are provided using redundant softswitch architecture with switching capabilities provided by Broadsoft.

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