Regional telco Consolidated Communications continues to make big strides in its fiber deployment plans. During the company’s second quarter earnings call with investors, CEO Bob Udell, said the company added 76,000 new fiber locations in the quarter, a significant increase from the 45,800 locations it added in the first quarter. Udell said that with 122,000 fiber upgrades completed so far in 2021 Consolidated is on pace to reach its goal of 300,000 new fiber locations this year and hit 70% of the company’s footprint, or 1.6 million fiber locations by 2025. Consolidated said its penetration rate in its 1-Gig capable markets is 14%, up from 12% at the end of the first quarter.
Many of those fiber upgrades occurring in northern New England, California and Texas. Udell said that the company constructed 1,400 new miles of fiber in the quarter.
Consolidated added 7,000 new fiber subscribers year-to-date. According to Udell, about 60% of those new fiber customers are new to Consolidated.
Udell said that the company’s strategy is to offer simple packages with competitive pricing and that its 1-Gig symmetrical data with no data caps is a key differentiator from the cable competitors in the market. When asked how the cable competition has responded to Consolidated’s 1-Gig offering, Udell said that the company is seeing some speed upgrades from the cable providers in its markets but other than that there has been little response. “We are so small still that we don’t get a ton of attention,” he said.
In the commercial data and transport business, the company said its SD-WAN revenue doubled year over year and it increased its on-net buildings by 11% year over year. It now has 14,250 on-net buildings in its portfolio.
Consolidated reported second quarter revenue of $320.4 million. Its consumer broadband revenue was $68 million, an increase of 3.7%. Commercial data and transport revenue was $90.8 million, an increase of 1.4%. Consolidated’s capital expenditures for the quarter were $119.2 million.
For the rest of 2021, Consolidated said it is still on track to spend between $400 million and $420 million in capital expenditures, most of which is for its fiber expansion plans.
Consolidated said that has secured all the PUC regulatory approvals for its Searchlight Capital Partners investment and that the second closing and an additional $75 million investment from Searchlight is set to close later this year.
Last fall SearchLight agreed to invest $350 million in the company with plans to invest another $75 million upon receipt of FCC approval. That deal has received shareholder approval as well as approval from PUC regulatory agencies. The company is expecting the FCC approval to occur later this year but said that the timeline has been impacted by the administration change at the FCC.
Searchlight’s investment is intended to reduce Consolidated’s net debt by $235 million and provide additional capital to accelerate the company’s fiber deployment.
Udell said that the company continues to see success with its public-private broadband partnerships and is working closing with a number of municipalities. So far, the company has completed five public partnership builds and has won bids for 16 municipal partnerships.
The company has announced some of these partnerships, one is in Brooklin, Maine, and three are in New Hampshire. Consolidated has said that these public private partnerships make it feasible for the company to bring high speed broadband to communities that otherwise would not be feasible.