Consolidated sees growing momentum in small cell backhaul

Wireless operators may have blanketed much of their towers with fiber, but Consolidated Communications is still seeing potential in large macro builds and growing potential in small cells.  

Speaking to investors during the Wells Fargo 2015 Technology, Media & Telecom Conference, Bob Udell, CEO of Consolidated said that while the provider is far along on the large fiber-to-the-tower buildout path it continues to win new deals.

"I think in the traditional service provider sense, and I think I can say that because the industry is changing so quickly, we're probably in the seventh inning of the large tower builds," Udell said. "Although I have said that for two or three years, we still have a good funnel of sold contracts that are not yet installed."

During the third quarter, Consolidated installed 130 new FTTT sites. Those tower sites were primarily driven by the record sales in the first quarter where it added 200 sites under contract. It also sold an additional 57 new sites sold for future installation.

But even as wireless operators near the end of their aggressive FTTT build requests, Consolidated is also seeing wireless operators ramp up their small cell deployments.

Evidence of this trend is being driven by large wireless operators like Verizon (NYSE: VZ) and Sprint (NYSE: S).

Verizon CFO Fran Shammo said earlier in the week that it will continue with its wireless densification projects, including the roll out of more small cells in key markets.

Similar to other wholesale carriers like FairPoint, TowerCloud, UPN and Zayo, Consolidated is enhancing its wholesale product suite with turnkey installation services for small cells like site acquisition and rights-of-way management.

"I see the large builds being replaced by small cells strategy so we're working hard to make that more of a turkey offering for our customers and to make the right-of-way and attachment process more efficient," Udell said. "I think that's going to replace some of the volume and some of our wholesale carrier business and team continues to exceed expectations."

Wireless backhaul is certainly a key driver for Consolidated to expand its fiber network, but the service provider has taken a smart build approach. As it builds out to towers, it will also look for opportunities to extend the fiber to a mix of other carrier customers, local schools, and businesses along that path.

Fiber expansion overall continues to be a key theme for Consolidated. In the third quarter, it added 880 new fiber route network miles and 231 new on-net fiber enabled buildings.

"If you think about the way our strategy for organic growth has worked, we have used either large business campus builds or wireless tower builds to extend our network," Udell said. "The way we're designing that as we build the network is to pass MDUs for triple play customers, pass business parks so we're not building a straight line from A to B, but we're making the best investment for additional growth."

Udell added that "once the fiber is there the incremental costs to add small cells becomes a lot more reasonable."

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