Breezeline, the U.S. operator owned by Canadian company Cogeco, has been working over the past year to grow its footprint in the states through a combination of acquisitions and construction. Company executives previously said the goal is to deliver fiber in locations currently served only by DSL or cable. But in New Hampshire, at least, some of its projects are teeing it up to go head-to-head with existing fiber provider Consolidated Communications in addition to cable incumbents.
The company’s expansion in New Hampshire has been ongoing since November 2021, when Breezeline announced plans to invest $80 million to reach 70,000 locations in two states, with West Virginia being its other target. It launched service in Somersworth, New Hampshire in February and followed up with a rollout in Concord in March. Breezeline’s fiber offering made its debut in Dover and Madbury in July. All told, those rollouts reached approximately 15,000 homes and businesses.
Now, Breezeline has set its sights on Durham, with plans to offer service there beginning in January 2023. There’s just one problem: in addition to cable incumbent Comcast, fiber provider Consolidated is already there. In fact, Consolidated also offers fiber in Concord.
It makes sense that multiple operators would target Concord, as the city is the third largest in New Hampshire, with a population of around 44,000. But its harder to see how three providers can hack it in a place like Durham, which has a population of around 15,500.
As analysts recently noted, the more broadband players there are in a market, the lower the market share for each. That’s a problem for fiber players who are pumping loads of cash into deployments and need sufficient returns to recoup their investment. And, as MoffettNathanson put it in a recent note to investors, “Those returns will only weaken further as buildouts are necessarily pushed out to less attractive, lower density, markets.”
That’s not to mention Breezeline will be coming to market in Durham with a trio of internet plans that offer speeds largely below what Consolidated has on the table. For instance, its fastest offerings are symmetrical 500 Mbps and 1-gig services, compared to Consolidated’s 1-gig and 2-gig plans. Pricing for the 1-gig plans is about the same, though value customers might choose Breezeline’s $50 per month 500-meg service over Consolidated’s 250-meg plan which runs $60 per month.
Breezeline sorely needs to win in its new fiber markets. The company lost 10,000 internet customers in its fiscal Q4 2022 (ended August 31, 2022), thanks in part to a rough transition of recently acquired customers in Ohio to its systems. Losses were tipped to continue into the company’s fiscal Q1 2023.
The operator is also up against two competitors in its Ohio markets: AT&T on the fiber side and Charter Communications on the cable side. But Cogeco CEO Philippe Jetté said on an earnings call in October the recent subscriber losses there were primarily due to service outages and transition hiccups rather than competition. The continued losses in FQ1 will be primarily driven by seasonal disconnections outside of its Ohio footprint, though CFO Patrice Ouimet added “The [broadband] market is also, I would say, slower at the moment.”
Breezeline hasn’t yet announced any additional markets in New Hampshire, but it faces a landscape that includes substantial fiber coverage from Consolidated and TDS Telecom as well as cable service from Comcast and Charter Communications.
Comcast is the incumbent cable provider for much of the southern half of New Hampshire, including in the cities of Concord, Dover, Durham, Nashua, Manchester and Portsmouth, coverage maps from BroadbandNow show. Fellow cable player Charter Communications covers areas more in the central and norther parts of the state, including Berlin, Campton, Conway, Gorham, Lancaster, Littleton and Plymouth.
Consolidated’s fiber footprint is concentrated in the southeastern part of the state, with pockets of availability in a smattering of towns elsewhere. TDS Telecom, meanwhile, offers fiber in the areas around Alton, Andover, Antrim, Henniker, Hollis, New London, Sutton, Warner and Wilton.