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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2023
GOODWILL AND INTANGIBLE ASSETS |
GOODWILL AND INTANGIBLE ASSETS | 7. GOODWILL AND INTANGIBLE ASSETS Goodwill The Company tests goodwill for impairment at each of its reporting units on an annual basis, which has been determined to be as of October 1st. The Company’s reporting units are one level below its operating segments. The Company also tests goodwill between annual tests if an event occurs or circumstances change that indicate that the fair value of a reporting unit may be below its carrying value. The Company’s qualitative goodwill impairment test includes, but is not limited to, assessing macroeconomic conditions, industry and market considerations, technological changes and trends, and overall financial performance of the reporting unit. The Company’s quantitative test for goodwill impairment involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. The Company determines the fair value of a reporting unit using the income approach. The income approach is based on a discounted cash flow (“DCF”) model. The DCF model requires the exercise of significant judgment, including judgments and assumptions about appropriate discount rates and revenue growth. Discount rates are based on a weighted-average cost of capital (“WACC”), which represents the average rate a business must pay its providers of debt and equity. The revenue growth and cash flows employed in the DCF model were derived from internal earnings and forecasts and external market forecasts. For its annual impairment analysis, as of October 1, 2023, the Company performed a quantitative analysis for the goodwill held in its US Telecom and International Telecom segments. The US Telecom segment holds $35.3 million of goodwill and the quantitative analysis, using an income approach, indicated that the fair value of the reporting unit, including goodwill, exceeded its carrying value by 16%. The Company’s analysis noted that its US Telecom segment continues to shift away from wholesale roaming and retail operations towards carrier managed services and fixed broadband services. Additionally, the reporting unit is executing several significant network upgrade projects concurrently. The success of these initiatives may materially impact the results of the reporting unit valuation. The inability to meet forecasts may result in an impairment loss. For the International Telecom segment the quantitative analysis was completed using a DCF model and determined that the fair value of each reporting unit significantly exceeded its carrying value, including goodwill. The impairment analysis concluded that no impairment was necessary in 2023. For its annual impairment analysis, as of October 1, 2022, the Company performed a quantitative analysis for the goodwill held in its US Telecom and a qualitative analysis for the goodwill held in its International Telecom segment. The Company’s analysis concluded that no impairment was necessary in 2022. During the year ended December 31, 2021, the Company recorded an impairment of $20.6 million in its International Telecom segment. The Company’s impairment analysis for its remaining reporting units determined that no impairment was necessary in 2021. The table below discloses goodwill recorded in each of the Company’s segments and accumulated impairment changes (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | International | ​ | US | ​ |  | ​
​ | ​ | Telecom | ​ | Telecom | ​ | Consolidated
Balance at December 31, 2022 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross | ​ | $ | 25,423 | ​ | $ | 35,268 | ​ | $ | 60,691
Accumulated Impairment | ​ |  | (20,587) | ​ |  | — | ​ |  | (20,587)
Net | ​ |  | 4,836 | ​ |  | 35,268 | ​ |  | 40,104
Balance at December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross | ​ | ​ | 25,423 | ​ | ​ | 35,268 | ​ | ​ | 60,691
Accumulated Impairment | ​ | ​ | (20,587) | ​ |  | — | ​ | ​ | (20,587)
Net | ​ | $ | 4,836 | ​ | $ | 35,268 | ​ | $ | 40,104
​ Telecommunications Licenses The Company tests those telecommunications licenses that are indefinite-lived for impairment on an annual basis, which has been determined to be as of October 1st. The Company also tests telecommunication licenses that are indefinite-lived between annual tests if an event occurs or circumstances change that indicate that the fair value of a reporting unit may be below its carrying value. The Company’s qualitative impairment test includes, but is not limited to, assessing macroeconomic conditions, industry and market considerations, technological changes and trends, overall financial performance, and legal and regulatory changes. The Company’s quantitative test for impairment involves a comparison of the estimated fair value of an asset to its carrying amount. The Company determines the fair value using either a market or income approach. The market approach uses prices generated by market transactions involving comparable assets. The income approach uses a DCF model. The DCF requires the exercise of significant judgement including Level 3 valuation inputs. The Company performed a quantitative assessment for certain International Telecom reporting units and qualitative assessments for its remaining reporting units during its annual impairment assessment of its indefinite lived telecommunication licenses in 2023. The quantitative assessment was performed using a Greenfield Approach. The Greenfield Approach assumes a company initially owns only the telecommunication licenses, and then makes investments required to build an operation comparable to the one that currently utilizes the licenses. The projected cash flows are based on certain factors, including revenue growth rates, margins, subscriber churn rates, and other operational data. The Company used a WACC of 11.5% in the analysis. The Company determined that there were no indications of potential impairment. The Company performed qualitative assessments for its annual impairment assessment of its indefinite lived telecommunications licenses for 2022 and determined that there were no indications of potential impairments. The changes in the carrying amount of the Company’s telecommunications licenses, by operating segment, were as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | International |  | US |  | ​ | ​ | ​
​ | ​ | Telecom | ​ | Telecom | ​ | Consolidated |
Balance at December 31, 2021 | ​ | $ | 34,798 | ​ | $ | 78,968 | ​ | $ | 113,766 | ​
Acquired licenses | ​ |  | — | ​ |  | 1,068 | ​ | ​ | 1,068 | ​
Dispositions | ​ |  | — | ​ |  | (1,136) | ​ | ​ | (1,136) | ​
Balance at December 31, 2022 | ​ | $ | 34,798 | ​ | $ | 78,900 | ​ | $ | 113,698 | ​
Acquired licenses | ​ |  | — | ​ |  | — | ​ | ​ | — | ​
Dispositions | ​ | ​ | — | ​ | ​ | (379) | ​ | ​ | (379) | ​
Balance at December 31, 2023 | ​ | $ | 34,798 | ​ | $ | 78,521 | ​ | $ | 113,319 | ​
​ The licenses acquired during 2022 are expected to be available for use into perpetuity. The Company recognized a gain of $0.3 million for license dispositions in 2023 and no gain or loss on the disposition in 2021. Customer Relationships The customer relationships are being amortized on an accelerated basis, over the expected period during which their economic benefits are to be realized. The Company recorded $11.1 million, $11.6 million, and $7.0 million of amortization related to customer relationships during the years ended December 31, 2023, 2022, and 2021, respectively. Future amortization of customer relationships is as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​
​ | International Telecom | ​ | US Telecom
2024 | $ | 576 | ​ | $ | 5,748
2025 | ​ | 576 | ​ | ​ | 2,779
2026 | ​ | 576 | ​ | ​ | —
2027 | ​ | 576 | ​ | ​ | —
2028 | ​ | 275 | ​ | ​ | —
Thereafter | ​ | 62 | ​ | ​ | —
Total | $ | 2,641 | ​ | $ | 8,527
​ Other Intangible Assets Other intangible assets includes $8.4 million and $9.7 million of trade names on the Company’s balance sheet as of December 31, 2023 and 2022, respectively. The Company recorded $1.3 million, $1.3 million, and $0.8 million of amortization related to trade names during the years ended December 31, 2023, 2022, and 2021, respectively. The tradenames have definite lives and future amortization of the tradenames are as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | International Telecom | ​ | US Telecom
2024 | $ | 307 | ​ | $ | 964
2025 | ​ | 307 | ​ | ​ | 879
2026 | ​ | 209 | ​ | ​ | 769
2027 | ​ | 37 | ​ | ​ | 718
2028 | ​ | — | ​ | ​ | 657
Thereafter | ​ | — | ​ | ​ | 3,570
Total | $ | 860 | ​ | $ | 7,557
​

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