Lumos Networks thinks copper is nice, but fiber is nicer

Lumos Networks coverage map

Lumos Networks coverage area

Lumos Networks (NASDAQ: LMOS), formerly the wireline division of NTELOS (Nasdaq: NTLS), is enjoying life as a separate company delivering wireline services to businesses and residential customers.

As a traditional ILEC located in Virginia with a presence in West Virginia and portions of Pennsylvania, Kentucky, Ohio, and Maryland, Lumos Networks has a good amount of copper and fiber in its network to deliver a mix of residential and business-grade services.

However, its crown jewel is its 5,800-mile fiber and MPLS network, which has been augmented in recent years through organic initiatives and its acquisitions of a major portion of Allegheny Energy's fiber network and FiberNet from the former ONE Communications.

For multisite customers that have varying bandwidth needs, Lumos will deploy a fiber-based Ethernet service to tie their sites together in a WAN. In a typical configuration, they'll deploy a fiber-based host site and use T-1s to connect remote to the host site via MPLS.

Over the fiber network, the service provider can deliver a suite of services, including Ethernet, IP services (IP Trunking, IP Centrex) and voice.

Jim Nester, director of public affairs for Lumos Networks, believes that end-to-end control versus having to rent facilities from other service providers leads to higher QoS for its customers.

"One thing that distinguishes us from other providers is that we own our fiber network," he said. "As a result, we have control end-to-end so we can manage services across our network without worrying about anomalies out of our control."

Nester added that another advantage of its network is that it's regional, meaning "that we have more fiber in a specific footprint as opposed to having less dense fiber strung out over a longer run."

Despite its preference for fiber-based solutions, Lumos does not shy away from EoC and EoTDM. It will provide copper-based Ethernet service, and is considering other new technologies to boost speeds over existing copper to higher speeds like 50 and 100 Mbps, which vary according to loop length and condition of copper pairs.  

Nester said that while it has "EoC/EoTDM in our markets, fiber is our future."

Lumos' bet on copper and fiber-based Metro Ethernet and IP-based services continues to pay off. In Q3 2011, the service provider expanded its Ethernet and IP-based services into six new market areas and 29 new markets in West Virginia, Pennsylvania and Maryland. It also brought an additional 46 buildings on-net during the quarter, with a total of 949 as of the end of September 2011.

The expansion of Metro Ethernet and IP-based in acquired markets helped drive up the company's year-over-year enterprise data revenues from $7.9 million in Q3 2010 to $8.6 million in Q3 2011.

Lumos Networks thinks copper is nice, but fiber is nicer