with Kurt Van Wagenen, CEO of FirstLight
Kurt Van Wagenen, CEO of FirstLight, sees that the service provider's value lies in its local approach and its ability to tailor "customer solutions that meet their needs." The service provider has been expanding its presence in both its upstate New York home and in northern New England via a mix of organic growth and purchasing other regional fiber-centric providers such as TelJet Longhaul. It has been seeing growth serving a mix of enterprise and wholesale carrier customers, particularly wireless operators. Van Wagenen took over the CEO helm last October from company founder Kevin O'Connor, who retired from the company. Sean Buckley, senior editor of FierceTelecom, recently spoke to Van Wagenen about his first days on the job and his views on growing opportunities in wholesale and business services.
FierceTelecom: Kurt, you have been in the competitive telecom industry for a number of years, having previously run NEON Networks, now Lightower, and more recently FiberTower. Can you talk about your first days on the job and how FirstLight compares to that previous experience?
Kurt Van Wagenen: I have been on the job for just about three months and I am very excited particularly about the growth potential for FirstLight. I have a 100-day plan and I am executing against and then heavily focused on getting out and meeting our customers and other stakeholders. I am also spending a lot of time just learning about FirstLight and how it operates and how our value proposition resonates in the marketplace. At the same time, I worked closely with this team; it's a very talented FirstLight team. Moving forward I will be focused on making sure we have the processes and discipline necessary to continue to provide high quality services that support our customers and also focus on really continuing the growth trajectory for the company.
FierceTelecom: What do you see as the key growth trends for FirstLight in 2014?
Van Wagenen: The company has had good success across three segments. We focus a lot on large enterprise customers and had a lot of success with hospitals, universities, banks, insurance companies and state and local government. We also have a strong small to medium business segment that is continuing to grow in the upstate New York state region and we look to expand that across our entire footprint. We also have a strong carrier business as well, serving both wireline carrier and wireless carrier. We're seeing actual growth in all three of those segments and expect to continue to see growth in each of those segments.
FierceTelecom: FirstLight has carved a growing niche in New England and New York state markets. Can you talk about the dynamics of these regions and the state of competition?
Van Wagenen: Actually, these are markets that have been traditionally underserved with few meaningful options in communications services so a fiber-based and customer-focused company like FirstLight is a real benefit to these local communities. Customers have responded by choosing us consistently as we go out and sell in these markets. Just by way of background, we provide high capacity, scalable communications that businesses throughout upstate New York and northern New England need to thrive in this digital age. We have had great success supporting carriers and health care companies and other verticals I talked about. One of the keys to our success is the local presence of our service and support. In my short time at FirstLight, I have come to appreciate the customers in these geographies that really want to work with a local provider. Our understanding of the geography and the needs of the community really benefit the organizations we work with and enable us to tailor customer solutions that meet their needs.
FierceTelecom: Speaking of carriers, a growing part of FirstLight's business is wireless backhaul. How do you see this segment shaping up and what trends are you seeing?
Van Wagenen: We're seeing strong demand for wireless backhaul in Tier 2 and Tier 3 markets where wireless operators roll out their 4G LTE networks and increase density in these regions. We have good relationships with the wireless carriers and FirstLight is well positioned to provide these services in these segments as we support the wireless carriers' traffic increases.
FierceTelecom: In the wireless backhaul market, the drive is to migrate from copper-based T1 to Ethernet. Are you seeing the same migration?
Van Wagenen: We're seeing that the preferred service is fiber-based Ethernet services for wireless backhaul and also we're also starting to see requests for dark fiber as well. Given the density of our fiber networks in the markets we operate, we have the ability to offer dark fiber solutions to our wireless carriers and to our enterprise carriers. We offer dark fiber when the lit service solutions aren't the right fit to support our customers' business applications.
Fierce Telecom: You mentioned dark fiber. Are you seeing more requests from wireless carriers to use dark fiber for backhaul?
Van Wagenen: It is very customer specific. We have certainly had more dialogue with some customers more than others. There are some that would prefer to have the lit services or maybe don't have the demand to justify to make that economic decision to move towards a dark fiber solution. I would say it's certainly customer dependent, but we are having those kinds of dark fiber discussions with some customers in our region.
FierceTelecom: Coming back to the business services segment, what are the top services customers are looking for?
Van Wagenen: We provide a broad range of services, everything from Internet data services, colocation as well as voice services. What we're finding is a lot of customers are migrating from TDM to Ethernet fairly quickly, with Ethernet being the first choice of service. Customers are increasingly looking for those bundled services in the regions they serve.
FierceTelecom: Cable operators continue to be aggressive with rolling out fiber-based services to address wholesale and business opportunities. Do you see them as a credible threat in the markets you serve?
Van Wagenen: We see similar types of customers across various geographies where you have the local LEC as a competitor as well as the cable companies. Then you have the alternative provider like us. We have had good success in this region competing with the large players largely because our heritage is very local in these markets so we can respond to our customer's needs. We can be flexible and we offer a full breadth of services and we tend to be very nimble with a deep fiber network as well.
Fierce Telecom: Finally, there's been considerable consolidation in the competitive service provider space in recent years, a trend that First Light itself is driving. Do you think we'll see more consolidation of this segment?
Van Wagenen: This type of network business certainly requires scale so I would expect consolidation will continue. I hope we would be an active participant in the consolidation. We look to acquire strong companies that are consistent with our business model that help us serve our customers and are accretive to our bottom line.