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Windstream is set to boost its software-defined wide area network (SD-WAN) business by acquiring privately held regional service provider Mass Communications (MassComm). Terms of the deal were not released.

According to an FCC filing, and previously reported by FierceTelecom, the all-cash deal will bring MassComm’s business, including its SD-WAN operations, under Windstream control.

MassComm is based in New York and offers voice, data, risk management, and security services. Its managed services business includes SD-WAN that can oversee multiple connection methods including MPLS and 4G LTE. According to Inc.5000, the company counts 42 employees and generated $25.6 million in revenues in 2016.

Windstream sources its SD-WAN technology from VeloCloud and offers it as a retail product to enterprises. VMware recently announced plans to acquire VeloCloud.

“The combination of MassComm’s innovative services and customer base with Windstream’s larger CLEC operations and fiber network will enable the combined company to increase its competitiveness by expanding its portfolio of services, generating efficiencies that benefit customers, and serving more customers over its own facilities where it can,” Windstream noted in the FCC filing.

Windstream said that at the end of last year more than 500 customers had signed up for its SD-WAN platform. Those included deals with Kona Grill and BCN Telecom.

Windstream reported that its SD-WAN business accounted for 19 percent of total sales from its enterprise business during the third quarter of last year compared with 11 percent in the previous quarter. Windstream CEO Anthony Thomas at that time told investors that migrating customers from legacy services to its SD-WAN platform was a significant opportunity for the company.

SD-WAN Market Consolidation

The deal also continues consolidation moves in the SD-WAN space. Besides the VMware acquisition of VeloCloud, Cisco recently completed its $610 million acquisition of Viptela.

IHS Markit reported the SD-WAN sector generated $116 million in revenues during the third quarter of this year. Leading vendors included VeloCloud, Aryaka, and Silver Peak.

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