Cincinnati Bell has made what it says are the right moves to become a fiber and entertainment-based company via its ongoing rollout of fiber-to-the-premises (FTTP) services to both businesses and increasingly, residential customers.
Speaking at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference, Cincinnati Bell CEO Ted Torbeck said that the company is on track to blanket a large part of its serving area with fiber.
"We got about 38 percent of the city covered today and we're hoping to have that accelerated over the next couple of years to reach our full potential, which we think is somewhere between 70 and 80 percent," Torbeck said. "On the consumer side of the business, we're very similar to what Google is trying to accomplish."
By selling off its wireless assets to Verizon (NYSE: VZ) and selling a large stake in Cyrus One, Cincinnati Bell now has more financial leverage to fuel its fiber network expansion.
Torbeck said that besides having enough cash on hand, the other issue that will dictate how fast it reaches its FTTP buildout goals is the way in which it adds more members to its technician and support workforce.
"The pace that we're going to build is not only based on money, but how fast we can ramp up the techs and the people that will install the service," Torbeck said. "You have to do it in a systematic way or it becomes out of control."
Today, the service provider is seeing strong take rates when it brings the Fioptics FTTP service into a new area of the city.
"We're executing extremely well where in the first pass we're getting somewhere close to 20 percent penetration and over time we're hoping to get 45 percent after we have been there a year or two," Torbeck said. "That's the target area that we're looking at."
Echoing recent comments made by Verizon's CEO Lowell McAdam, Torbeck said that while having entertainment and broadband coupled together is important, broadband is the more critical piece.
"We think controlling the pipe to the home or the business is critical," he said. "The demand for speed and capacity has never been greater so we think that broadband will be the most integral part of this."
One of the latest twists in Cincinnati Bell's FTTP play is the introduction of its 1 Gbps services for its Fioptics consumer customers last week. Initially, it only provided the higher speed fiber service for its business customers.
Despite its ongoing move to provide FTTP services, Cincinnati city officials began lobbying Google Fiber to be its next fiber city in March. Cincinnati previously made an unsuccessful bid to become one of the Internet giant's targets.
By comparison, Cincinnati Bell's main cable competitor Time Warner Cable (NYSE: TWC) currently can provide up to 50-100 Mbps, which is far slower than the telco's offering.
However, the service provider knows that besides speed, it has to deliver a good customer experience to stay competitive with TWC .
"Time Warner Cable has not gone away," Torbeck said. "Earlier this year, [it] came out with a 2 Mbps service for $14.99 for Internet customers, so we dropped our price to $14.99 and matched where they were and the bleeding has subsided."
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Updated article on Sept. 19 to correct the fact that TWC is offering a 2 Mbps offering for $14.99 not 5 Mbps.