Lumos has set some ambitious goals for its fiber roll out in its Virginia market, adding more on-net buildings to its fiber network and conducting 825-mile fiber network expansion – two milestones that were enabled by accelerating its fiber installation process.
Speaking to investors during its fourth quarter 2015 earnings call, Tim Biltz, CEO of Lumos, said that the service provider has raised its on-time delivery rates to nearly 100 percent.
"Faster fiber installations to our customers mean better revenue velocity. Our service teams are doing an outstanding job," Biltz said during the earnings call, according to a Reuters Thomson transcript. "In the first half of 2015, our installation on-time delivery rate was around 80 percent, improving to over 90 percent in the second half of 2015, and reaching 98 percent for the first two months of 2016."
The service provider saw an uptick in installation of fiber to business buildings, adding 255 buildings over the past year to end the period with a total of 1,732 buildings, up from 1,407 in the same period a year ago.
"We added 21 buildings per month, which is nearly twice the pace, which we added in 2013 and 2014," Biltz said. "These 255 new on-net Enterprise locations are essentially all success-based, producing revenue on day one of installation and are a great leading indicator for Enterprise revenue acceleration."
By adding more on-net buildings -- particularly those that have multiple business tenants -- the service provider creates an environment where it could potentially increase its enterprise service revenues. The service provider has taken the approach of gaining a sale with an anchor tenant and looking for other opportunities within a location to sell to other businesses.
"On-net locations, driven by success-based builds, by definition, sustain high levels of on-net revenue," Biltz said.
But expanding its on-net fiber reach into buildings is only one part of Lumos' installation equation.
The service provider is nearing completion of its 825-mile network expansion into the Richmond and Norfolk Hampton Roads Markets. Interestingly, this network expansion is being driven by a new 270,000 fiber to the cell site contract with a national wireless operator.
Biltz said that the Hampton Roads project will be completed "in the next few weeks" ahead of its original schedule of the third quarter 2016.
While Lumos has made wireless backhaul a key priority of growth, the service provider is using the fiber installations to towers as a foundation from which it can deliver more business customers that reside nearby the towers.
"We have booked $500,000 in annualized Enterprise revenue in our Norfolk market and another $2.5 million in Richmond for a total of $3 million in annualized Enterprise revenue," Biltz said. "A key attribute of our strategy is selling Enterprise on top of our fiber-to-the-cell networks, and we are executing on this real-time."
Being able to increase its on-time delivery of fiber was certainly seen in its fourth quarter earnings enterprise revenues. Lumos reported fourth quarter Enterprise revenues of $11.9 million, up sequentially from $11.6 million in the third quarter.
- listen to the earnings webcast (reg req.)
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