Lumos Networks may be in the process of separating its rural LEC and fiber businesses as two separate companies, but the telco is seeing its 1 Gbps service residential rollout attract more customers to purchase higher broadband speeds.
As a way to entice more customers to purchase 1 Gbps, Lumos recently announced a $70 per month, two-year promotion. And, since 1 Gbps isn’t a fit for every customer, the service provider has been revamping its Residential and Small Business (R&SB) unit by offering upgrades on other speed tiers.
The service provider will increase to its middle speed profiles by moving existing fiber internet customers from 50 Mbps to 75 Mbps and 100 Mbps to 150 Mbps.
Lumos has seen the average blended speed on its FTTH network rise 30 percent to 40 Mbps. Today, the service provider has passed over 20,000 addresses with fiber, spread over three rural counties in Virginia—Alleghany, Botetourt and Waynesboro.
Will Davis, SVP of marketing and investor relations and chief of staff for Lumos Networks, told FierceTelecom that the 1 Gbps presence has raised customer awareness of all of its speed tiers.
“We have seen a halo effect of fiber speeds,” Davis said. “We have 1 Gbps available to 100 percent of the fiber homes and we’re seeing the rest of the subscriber base push up their speed profile.”
Over the past two years, Lumos has debuted FTTH services to curb legacy POTS losses in the R&SB unit. Lumos has been able to narrow its RS&B segment revenues losses from 12 percent to 4 percent.
“The FTTH rollout is a big part of this improvement because the economics of FTTH are solid and the churn trends are good,” Davis said.
Leverage and extend
In order to get an initial good return on its investment for FTTH, Lumos initially targeted densely populated subdivisions.
The telco’s FTTH footprint is spread over three counties that contain about 44,000 homes. Lumos has built out fiber to about 19,000 of those homes thus far.
Since the majority of the markets Lumos serves with FTTH are rural, it is a bit more difficult to build a business case.
“The only unique challenge we have is the rural nature,” said Diego Anderson, SVP and general manager of (R&SB) for Lumos Networks. “When you go outside of the core markets into the more rural areas of the counties it makes a bit harder to pull fiber and make the numbers work because you’re not passing as many homes per square mile.”
Anderson added that the telco is also “leveraging some of the advanced DSL technologies to serve those customers as well.”
Lumos is mitigating some of its FTTH rural installation challenges by taking a leverage-and-extend approach to bringing 1 Gbps speeds to customers.
If a customer is already passed by the fiber network, Lumos only has to install a fiber drop connection and an optical network terminal (ONT) to the home. For customers already who already have FTTH service and want to be upgraded to 1 Gbps, the service provider can just remotely provision the service.
Beyond the technical issues, Lumos is working to communicate with customers on how an FTTH connection works to support the ever-growing array of IP-based devices in the home.
“A lot of what we’re doing is educating the customer on the benefits of the fiber and what 1 Gbps really means,” Anderson said. “That’s part of our marketing plans too, as we talk to customers and let them know the benefits of having that fiber footprint and what this 1 Gbps speed can really do as the technology advances.”
Driving SMB interest
Besides making more compelling services for residential customers, Lumos is also keen on the idea that fiber can make the areas they serve more attractive to smaller businesses.
The service provider has been working with the local chambers of commerce in the cities and towns it serves to educate businesses and residents about its fiber network.
Similar to other communities like Chattanooga, Tennessee, Lumos can target small businesses that want more affordable broadband speeds in areas that were limited to 1.5 Mbps T1 copper connections.
“One thing we’re doing is marketing more to our SMB customers on this GPON product,” Anderson said. “We are now offering symmetrical speeds on our GPON network because a lot of them have a greater need for upload speeds ... and that’s one distinguishing factor we have in our product offering versus the other providers.”