Leigh Fox, CEO of Cincinnati Bell, told investors during its fourth-quarter earnings call that given the density of its growing FTTH network it will be hard for wireless operators to match the capabilities it can currently deliver to consumers and businesses.
“We view it is more of an opportunity than a risk,” Fox said during the earnings call, according to a Seeking Alpha transcript. “I think it’s going to be very hard to in the near-term offset our core products, such as fiber based bandwidth.”
RELATED: Cincinnati Bell reaches 70% of Cincinnati’s homes, businesses with fiber
Fox added that with “any technology like 5G, you need a very, very strong redundant terrestrial network, and that’s what we have.”
Focus on ramping speeds, expansion
Today, Cincinnati Bell which now reaches 70% of Cincinnati’s homes and businesses with fiber, has enabled 53% of its customer base to get gigabit speeds.
In its Fiber-to-the-node (FTTN) markets, 17% of its customers can receive up to 50 Mbps speeds.
As part of its agreement with Hawaii’s Department of Commerce and Consumer Affairs’ (DCCA) Cable Television Division (CATV) to get conditional approval for the acquisition, Cincinnati Bell has agreed to invest $20 million to improve and build out Hawaiian Telcom’s next-gen fiber network statewide. The agreement states it must complete the build-out within four years of the merger closing.
Even before Cincinnati Bell formally enters Hawaii, Hawiian Telcom has continued to advance its own current fiber network expansion efforts. In the third quarter, Hawaiian Telcom enabled fiber in 1,000 additional consumer households on O'ahu, including success-based bulk multidwelling units and greenfield single-family homes, bringing total NGN households to 205,000, or approximately two-thirds of total marketable households on O'ahu.
Fox said that Cincinnati Bell will be in a similar fiber-centric situation in Hawaii when it completes its acquisition of Hawaiian Telcom later this year.
“We have that both [in Cincinnati] and we will have that in Hawaii also,” Fox said. “And I think that makes it very much an opportunity for us in the mid-term and the long-term.”
Backhaul bonanza
Cincinnati Bell’s aggressive fiber builds also put it into the front running for new macro and small cell backhaul deals. The telco is already a notable wireless backhaul player in not only Cincinnati but also Hawaii.
In December, Cincinnati Bell won a 1,100-site wireless tower backhaul contract, a deal that increased its macro tower market share to over 90%, for example.
While Verizon has cited it prefers building out its own fiber networks for backhaul, there will still be situations where it will make more sense to lease fiber from another provider like Cincinnati Bell or Zayo.
“As these carriers move into markets, really the decision is do we build our own fiber infrastructure or do we buy it from a provider in place?” Fox said. “Obviously, when it comes in our markets, they’re going to see very strong secure redundant fiber networks.”
Fox added “the cost to build is going to be very high for them versus using us so we see a lot of opportunity on the carrier side and the wholesale side.”
Despite the future backhaul opportunities Cincinnati Bell could get from 5G wireless backhaul, the service provider is not immune to near-term wholesale service declines as wireless and other service providers migrate from copper-based TDM circuits to either lit fiber-based Ethernet or dark fiber solutions. During the fourth quarter, Cincinnati Bell’s carrier market revenues declined 5% to $23 million.
Fox said the “decline in the fourth quarter was due to challenges related to ongoing pricing pressures and carriers’ increased focus on improving network efficiencies.”