Cincinnati Bell expects to see 80%-90% Fioptics penetration in 3 years

city of cincinnati

Cincinnati Bell is on track to reach about 80%-90% of its customer base in Cincinnati with its fiber-based Fioptics service within the next few years as the telco continues its aggressive fiber build-out initiative.

Andy Kaiser, CFO of Cincinnati Bell told investors during its third-quarter earnings call that the network build will be carried out in a “methodical” way.

“Looking out at the next several years, we think we have an efficient build strategy, but we’re looking at three years out to get to the 80%-90% goal,” Kaiser said.

Cincinnati Bell is well on its way to meet that goal. As of the end of the third quarter, Cincinnati Bell had passed a total of 564.7 locations with its Fioptics service. On a year to date basis, the telco has passed 31,300 new addresses with Fioptics and said it's on track to reach 35,000 new addresses for the year.

It had a total of 221,200 Fioptics subscribers, while the copper-based DSL broadband base dropped to 86,700 customers.

While FTTH is certainly the preferred path, the telco is looking at other copper-based methods, including VDSL2 and Gfast.

While it has not launched a specific program yet, Cincinnati Bell continues to evaluate Gfast for multidwelling unit (MDU) applications.

Eyeing Gfast

Gfast allows a telco like Cincinnati Bell to bring fiber into a basement of an MDU and use the existing copper or coax to deliver high speed services of up to 1 Gbps to each living unit.

“In the MDU areas, including apartments, we’re looking at Gfast technologies,” said Tom Simpson, COO and CTO of Cincinnati Bell. “Gfast is a fiber to the prem solution where you use copper inside the building to achieve higher speed bandwidth.”

Cincinnati Bell could look to fellow telco AT&T, who is rolling out Gfast in over 20 markets leveraging existing coax cable inside the buildings it serves.

Hybrid copper, fiber for rural areas

Outside of its more populated areas, Cincinnati Bell will likely use a fiber-to-the-node (FTTN) solution.

In these scenarios, the telco would bring fiber to a remote terminal node and then use a mix of VDSL2 and other technologies to connect to each customer via copper.

“FTTN would be used in very rural areas where you have very low households per mile densities,” Simpson said. “Those are areas where we can extend fiber very close to the node and still achieve comparable speeds.”

However, the service provider has not revealed any specific plans for the rural markets yet.  

Here’s a breakdown of Cincinnati Bell’s key metrics:

  • Entertainment and Communications revenue was $196 million, up $3 million year-over-year. Within this segment, Fioptics was the star performer with $79 million in revenue, up 21% year-over-year. Strategic business and carrier revenue also rose 6% to $53 million.
     
  • IT Services and Hardware revenue remained flat sequentially at $96 million, but down $27 million year-over-year. Strategic revenue was $41 million, down $9 million year-over-year, reflecting what Cincinnati Bell said was due to cost cutting initiatives by a large customer. Telecom and IT hardware sales were of $44 million, down 33% year-over-year.
     
  • Financials: Consolidated third-quarter 2017 revenue was $289 million, down 7% from the prior year, as strategic revenue growth driven by strong demand for fiber-based products was offset by lower Telecom and IT hardware sales.