Consolidated says FairPoint deal enhances its tower, small cell backhaul chances

radio tower (pixabay)
Consolidated sees potential upside for growing its small cell and tower backhaul capabilities through its purchase of FairPoint.

Consolidated may have only announced its purchase of FairPoint on Monday, but the service provider says it sees potential upside for growing its small cell and tower backhaul capabilities.

Bob Udell, CEO of Consolidated, told investors at the UBS 44th Annual Global Media and Communications Conference that it can leverage FairPoint’s established installation processes and existing fiber network to better respond to wireless operator customer needs as they migrate to 5G.

RELATED: Consolidated snaps up FairPoint for $1.5B, adds 3K on-net buildings, fiber to the tower footprint

“FairPoint has a really good construction engine for building out those towers, and they have been disciplined about the deals they do,” Udell said. “We have been moving into the small cell space as you have seen over the past 3 or 4 quarters.”

As it moves ahead with its acquisition of FairPoint, Consolidated will look for ways to combine each company’s fiber network to penetrate more rural areas.

The service provider has been developing a series of lit and dark fiber solutions that it says can accommodate small cell deployments, but it could not cite any specific customer wins.

Dark, lit fiber options

Prior to announcing its deal with Consolidated, FairPoint had built out a sizable wireless backhaul business, particularly in its northern New England market. FairPoint has connected its fiber to over 1,300 towers via contracts with wireless carriers since it entered the market in 2011.

Interestingly, FairPoint broke its ban on selling dark fiber services in March, citing new opportunities for small cells and changes in the FCC’s E-rate program.

Since FairPoint operates in Tier 2 and Tier 3 markets, the telco has not seen a large amount of small cell networks in northern New England yet, but like Consolidated wanted to have a solution in place.

“We have heard a lot of people talk about small cells, but we have talked about it less and are working on solutions so we’re doing managed hybrid dark fiber solutions for all of the large carriers,” Udell said. “We expect we’ll have an application to extend into the harder to reach areas of FairPoint’s markets.”

Consolidated will also be able to leverage and extend FairPoint’s dark fiber solutions to more of its existing and new school district customers. FairPoint can now extend dark fiber to school districts following a change in the FCC’s E-Rate funding rules.

As part of the FCC's E-Rate order that was issued in 2015, the regulator amended the eligible services list to support the equal treatment of lit and dark fiber services. What this means is that local school districts will be able to purchase either kind of service depending on their specific needs via an FCC Form 470 application.

Near-net fiber opportunities

While Consolidated continues to expand its fiber network to serve more business and wireless backhaul opportunities in its own territories, the service provider expects to gain access to more near-net opportunities.

Since these near-net fiber connections are close to buildings and towers, Consolidated can more effectively extend those facilities in a rapid timeline.

During its due diligence process, Consolidated did a thorough analysis of where FairPoint’s fiber was located.

“We did an extensive study and my first priority was to validate that every mile and foot of fiber was there that we thought would be there,” Udell said. “In that process, we had an external third party help us with the market opportunity within 5,000 feet of their fiber network and it’s good.”

Udell added that this process enabled them to forecast their sales process and begin integration plans.

“This gave us confidence that not only was the fiber there but how to size our sales strategy and how to figure it into the first two years of our integration strategy so we can quickly bring in our product set and consultative sales approach to market,” Udell said.