Cincinnati Bell's Torbeck sees growing potential in small cell backhaul

Cincinnati Bell may have left the wireless services industry by selling its spectrum and related holdings to Verizon (NYSE: VZ) last April, but the service provider is aggressively pursuing new small cell wireless backhaul opportunities in its serving territory.

Ted Torbeck, CEO of Cincinnati Bell, told investors during the fourth-quarter earnings call that the company has already won a small cell backhaul contract with one of the largest wireless operators.

"In addition to our success with Fioptics, I am also pleased to announce, we recently secured a $30 million, multi-year small cell agreement with a national carrier," Torbeck said, according to a Seeking Alpha transcript. "We believe this win is in the first step in a much broader opportunity for us, as we are uniquely positioned with both networking and wireless expertise."

Torbeck added that its small cell backhaul strategy is not a build-it-and-they-will-come strategy, but rather one where it is building out facilities for customers that can deliver a decent return on the network build investment.

"All of our investments remain success-based and we will continue to actively monitor all the key metrics that drive return," Torbeck said.

Cincinnati Bell has built out 26 small sites that are on-air today with plans to develop about 180 more in 2015.

Although the continued buildout of its fiber-based broadband network service Fioptics is a key focus for the telco, the service provider revealed that its strategic capital investments of $50 million to $55 million will be dedicated to other projects, including deploying fiber facilities to small cell sites.

The telco has plenty of experience in dealing with wireless backhaul, particularly fiber-based services. Cincinnati Bell currently provides wireless backhaul to 70 percent of the 1,100 traditional wireless towers in its footprint. About half of those towers have been equipped with fiber.

Besides having experience in delivering wireless backhaul, Cincinnati Bell contends what differentiates it from other providers is that it retained some of its wireless expertise and can provide end-to-end management of each circuit.  

"Wireless expertise is a big plus in winning these small cell [contracts], so we've actually transferred wireless engineers over to the carrier market business, and it's been very successful as they speak the same language as these carriers," Torbeck said. "It's been very, very successful.

For more:
- see the earnings transcript (sub. req.)

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