Regional U.S. operator Shenandoah Telecommunications (Shentel) revealed its Glo Fiber business hit another quarterly construction record in Q1 2022, adding its backlog for planned passings now stands at more than 250,000 locations. The operator also announced plans to decommission more than a dozen of its Beam fixed wireless access sites, arguing government funding for new broadband deployments has cut off the service’s path to profitability in certain unserved areas.
In Q1, Shentel added 18,000 new Glo Fiber passings to end the quarter with a total of nearly 94,000. On an earnings call, COO Ed McKay said it has new secured the necessary franchise approvals for a total of 339,000 Glo Fiber passings, getting it 75% of the way toward its previously announced goal of reaching 450,000 locations by 2026. Taking into account the 94,000 which were already built and adding in another 16,000 unserved homes Shentel won government grants to serve, it now has a construction backlog of 261,000 fiber locations, he said.
While CEO Chris French noted a “significant number” of newly passed households weren’t released to its sales team until the end of Q1, the operator still added 2,400 Glo Fiber customers. That figure was up 76.1% from 1,366 in Q1 2021. Shentel also gained 946 cable customers and 204 Beam subscribers.
“We finished the quarter on a high note with almost 1,000 Glo data net adds in March and have seen this momentum continue into April,” French said on the call.
CFO Jim Volk stated “several” of the 13 markets where it has launched Glo Fiber are already EBITDA positive, with the business overall expected to become EBITDA positive by the end of 2022.
Within Shentel’s broadband segment, Glo Fiber revenue rose 7% year on year to $9.1 million, cable was up 9.3% to $46.9 million and Beam revenue was flat at $3.7 million. Elsewhere, Shentel’s tower revenue was up 3.9% to $4.8 million. Consolidated revenue rose 7.9% to $64.4 million, but the company swung from a $51.4 million profit in Q1 2021 to a loss of $603,000.
Fixed wireless
Late last year, Shentel announced plans to pause expansion of its Beam FWA product in order to reallocate funds for its fiber ambitions. Now, though, McKay said it actually plans to remove around 20 “unprofitable” Beam sites with very low penetration rates at the end of Q2.
“The influx of government broadband grants for unserved areas has fundamentally undermined our Beam model and many of the sites we constructed no longer have a path to profitability,” he explained.
The operator currently reaches around 28,000 locations with its Beam service. However, McKay said it is slashing its targeted number of passings to 19,000 to account for the aforementioned turndown of certain sites.