Cincinnati Bell is seeking ways to extend its fiber network outside of its Cincinnati region to fulfill a mix of multi-site business and wireless backhaul deals, according to CEO Ted Torbeck, who told investors that the telco will either expand its own fiber network or buy a regional fiber provider.
“We don't have to do anything, but clearly as we look to go out of territory, it is something that we will continue to look at opportunities mainly on the business front,” Torbeck said during the earnings call, according to a Seeking Alpha earnings transcript. “The IT services side is where we see a lot of opportunities, but again we don't have to do anything and it's something that we'll continue to look at. If it adds shareholder value, we will consider it.”
Torbeck said that the telco continues to “see favorable results for our business customers and believe there are additional opportunities for us to win both in and outside of Cincinnati.”
However, the telco cautioned any out of region expansions will be done carefully with an eye towards getting a positive return for its investments.
“As we look out of territory, it's going to be from a very capital efficient standpoint,” said Leigh Fox, CFO of Cincinnati Bell. “We're not looking to be a massive overbuilder anywhere.”
But even as Cincinnati Bell sharpens its fiber service focus, the telco is not immune to the copper-to-fiber growing pains that are common at traditional telcos.
Similar to its telco counterparts AT&T and FairPoint, Cincinnati Bell's business revenues remained flat at $71 million, a factor that it attributes to this transition. Further, while next-gen data service revenues rose to $24 million, legacy data services like frame relay and ATM declined to $5.1 million.
Cincinnati Bell noted hardware sales declined due to the cyclical nature of the business and customers’ ongoing migration to cloud-based services.
“Business revenues totaled $71 million for the quarter, which was consistent with the prior year as we continue to transition customers from legacy-based copper services to more strategic-based fiber offerings,” Torbeck said. “We expect this trend to continue as we focus on introducing our mid-major customers to VoIP platform customized to fit their business needs.”
Despite the near-term growing pains, Cincinnati Bell could appeal to a larger set of customers looking for business service options by expanding its fiber network inside its own region and outside of Cincinnati.
- read the Seeking Alpha earnings transcript (reg. req.)
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