WideOpenWest (WOW!) is well on schedule with its ambitions to build out fiber to 400,000 new locations within the next few years. The operator anticipates gaining the first customers from its new greenfield deployments by year-end, with CEO Teresa Elder saying WOW! is close to “breaking ground” in its project plans.
“We definitely have construction companies, the supply chain, all of those things sorted,” she said at a Tuesday Credit Suisse investor conference. “We’ve got the machine rolling. So now we’re excited to, over the next six months, getting ourselves to the position of having customers.”
WOW! last December initially outlined plans to build fiber-to-the-home to 200,000 locations by 2025, with intent to press for more passings if it found success in its starter markets.
After reporting first quarter earnings, WOW! locked in the 400,000 target, saying it expects to reach around 150,000 locations with its initial greenfield deployments in Florida’s Seminole and Orange counties.
Regarding costs on construction and labor, Elder isn’t worried about any bottlenecks on those fronts.
“On the labor side, we’ve actually got long-term relationships with the construction companies and have agreements with them for multiple years,” she said. “This is right in our wheelhouse; this is the kind of work we’ve been doing for years.”
Elder added WOW! planned accordingly to work around global supply chain issues. CFO John Rego noted on the investor call the company has already placed its in-house supply orders for 2023.
“We got ahead of the curve on that and have been ordering and have things coming in, so we won’t have that as any kind of a bottleneck,” said Elder. “We’re feeling good about how we’re positioned.”
Rego highlighted the importance of the greenfield deployments in WOW!’s long-term growth. The operator in its Q1 earnings report ramped up its projected compound annual growth rate (CAGR) for high-speed data (HSD) revenue to 11-12% - a target Rego thinks is more than doable.
“Our growth CapEx this year was $80 million, which is a lot for us. More than twice what it’s ever been,” he said. “The future is in expanding our existing base as best we can, but the bigger growth story is in the greenfield builds.”
When WOW! selects its greenfield locations, Rego said the company’s “cherry picking” markets where there aren’t an overwhelming number of competitors.
“We tend to do much better in places where there’s maybe one large competitor and some DSL provider,” he said. “We’re not changing that growth number at all. We’re moving towards markets where we can be really competitive and penetrate very quickly."
Rego added average revenue per user (ARPU) for HSD has sequentially gone up eight quarters in a row, something he doesn’t expect will change anytime soon. Moreover, 51% of WOW!’s new subscribers are choosing plans with 500 Mbps or greater, he said.
A topic that often comes up at investor conferences is whether Fixed Wireless Access (FWA) competitively impacts the fiber business. Elder echoed what other operators have said in that FWA isn’t a “competitive threat” to WOW!
“For a customer, they really look for something that is very reliable, that has high speeds, isn’t complicated to set up,” she said. “That’s where WOW! is very successful. We tend to compete extremely well against fixed wireless competitors.”
WOW! is also one of several broadband providers to launch a wireless service, which officially launched in Montgomery, Alabama, last week – in partnership with mobile virtual network operator Reach Mobile.