Ting avoids fiber cabling shortage by striking direct supplier deals

trench dug for fiber

Ting, which is rolling out FTTH services in select markets, said that it has not been hurt by the current dearth of available fiber cabling in the United States.

CEO Elliot Noss told investors during its second quarter earnings call that it was able to avoid supply issues by establishing direct agreements with its fiber suppliers so it could create a stockpile of fiber.

“There has been a shortage in the U.S. of fiber optic cable,” Noss said during the earnings call, according to a Seeking Alpha transcript. “I am pleased that we protected ourselves ahead of this shortage by securing and storing large amounts of fiber for our project by dealing with suppliers globally. The pipeline of new cities is full and we expect to be sharing additional locations before the end of the year.”

One market where Ting saw a delay in build out due to a fiber shortage was in Westminster, Maryland, where the city's construction partners could not get fiber delivered on time. In 2015, Ting was awarded a contract by Westminster's city councilors to act as the city's private sector service provider partner to deliver services. After a number of attempts to lure local cable operators and telcos to enhance their broadband offerings, Westminster began the buildout of its open access fiber project last October, which is set to reach 9,000 homes and 500 businesses.

Ting said that when it completes the next phase of network construction in Westminster, Maryland by next year, the service provider would gain 2,700 serviceable homes and businesses.

“What happened in Westminster was they had through their contractors had to delay their build because they couldn’t get fiber,” Noss said. “You know that had the effect of moving the dates that I’ve talked about when we might see some more addresses in Westminster out by 60 to 90 days and it was through that lens that we learned that there is generally a shortage of fiber in the domestic U.S.”

Corning, for instance, reported during the first quarter that an issue with its manufacturing software prevented the vendor from processing customer orders. The vendor said the impact of the manufacturing issues mainly impacted its North American-based customers.

Despite the fiber shortages, Ting is attracting customers to its FTTH service in Charlottesville, Virginia, and Holly Springs, North Carolina.

In Charlottesville, Noss said that Ting saw demand for its service and “our advertising partnerships and events have given us brand awareness.”

Noss added that the service provider is improving the way it delivers service with enhanced installation and access to streamlined permitting processes.

“We are getting better and better at every step of the process from building out the network to taking orders and scheduling installs, to performing those installs more efficiently to permitting,” Noss said. “And we continue to see the same sort of customer satisfaction and advocacy with Ting Internet to propel the business on Ting Mobile.”

Besides offering services to single family homes, Ting is finding success in the multi-dwelling unit (MDU) segment. The service provider won a bulk MDU deal with Charlottesville-based Jefferson Ridge Apartment Homes, offering residents in its 234 units internet services as part of their monthly rent.

Noss said that since launching the service in Jefferson Ridge, “residences in other large residential buildings in Charlottesville are starting to pressure the landlords to offer the same.”

Over in Holly Springs, North Carolina, the service provider plans to complete a FTTH build by the end of 2016 but the majority of that build will focus on single family homes served by underground fiber facilities. The service provider expects that the estimated $2,500 cost to connect each customer will depend on the specific construction needs of each town.

“As we begin construction at Holly Springs, it is worth reiterating that the $2,500 per customer number that we have outlined will vary from town-to-town based on the nature of the build,” Noss said. “In Holly Springs, we will be extending the fiber primarily underground rather than across poles and the lot sizes are bigger than in most markets and there are also very few MDUs at Holly Springs.”

For more:
- read the Seeking Alpha earnings transcript (sub. req.)

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Ting to take 1 Gig service to Westminster, Md.
Ting to connect Holly Springs, N.C. homes with FTTH by end of 2016
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