Consolidated Communications (Nasdaq: CNSL) may still be integrating SureWest into its fold, but according to CFO Steve Childers the service provider is hungry to pursue new deals that allow it to diversify its revenue streams.
Speaking at the Wells Fargo Securities Tech, Media & Telecom Conference, Childers said Consolidated is interested in looking at other service providers that could potentially enhance the reach of its fiber network to deliver metro Ethernet and fiber to the tower (FTTT) services to wireless operators.
"We are looking at assets that would help us continue to accelerate the diversity path and add some top line growth and those are probably based on the fiber side or potentially on the cable leveraging the experience that we're getting with our Kansas City assets," Childers said. "For the right size and the right valuation we would not hesitate to go into another state.
Fiber-based services, including fiber-based wireless backhaul and retail metro Ethernet, were key revenue drivers for Consolidated in Q3 2013.
The service provider reported that metro Ethernet rose 40 percent year-over-year. Being a traditional ILEC, Consolidated can accommodate the needs of larger businesses that want a fiber-based connection and SMBs with Ethernet over Copper (EoC).
"We really think being able to deliver Ethernet now in all of our markets on copper or fiber is really one of the key components of how we're going to deliver business solutions going forward," Childers said. "Over the long term metro Ethernet is going to have more growth opportunities than fiber to the tower."
While it sees great potential with retail metro Ethernet, it is seeing positive results with its wireless backhaul business. During the quarter it added service to 68 new tower sites has 180 other towers under contract.
"The fiber to the tower opportunity is not going to last forever, but we don't think we're at the end of it yet," Childers said. "It's probably more mature in the more metro markets than what we are seeing in the rural areas we serve."
Childers added that some of the wireless carriers "are still doing their first wave of build outs there so we still think there's some opportunity while it's there."
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