Competition from larger, financially stronger incumbent telecommunications providers; Increasing competition from cable operators looking to expand commercial services; Dependent on incumbent carriers for the "last mile" of final customer connection; Declining intercarrier compensation (ICC) revenues; Ongoing shift of customers to more efficient and cost-effective technologies; and Ability to target larger, multi-location business accounts, and capitalize on selling high-margin, value-added products and services. High adjusted leverage expected to be above 6x in 2016; and Potential for debt-financed acquisitions or dividends to private equity owners, which could result in higher leverage. The stable rating outlook on Los Angeles-based U.S. TelePacific Holdings Corp. reflects S&P Global Ratings' expectation that revenues will increase in the low-single digits pro forma for the DSCI Corp. acquisition.
