Consolidated Communications Passes More Than 40K Locations with FTTH in Q1 2021

Telco is on track to enable 2.7 million  homes and businesses with 1 Gbps fiber broadband speeds or higher.

  • Consolidated Communications

Consolidated Communications has set a path to expand its fiber-to-the-home (FTTH) reach even further this year, with plans to upgrade a minimum of 1.6 million locations over the next five years.

When the telco completes this feat, more than 70 percent of its total 2.7 million addressable homes and businesses in its footprint will be eligible to get 1 Gbps speeds or higher.

Consolidated appears to be making progress on reaching this goal. During the first quarter, it upgraded nearly 46,000 passings to gigabit fiber–capable services in the first quarter in northern New England, California and Texas. During that period, crews constructed 770 miles of new fiber, placing 288 fiber count or larger cables to meet the high-capacity needs of its consumer, commercial and carrier customers for several years.

Bob Udell, CEO of Consolidated, told investors that “the first-quarter number of fiber passings upgraded is 20 times the number we built in all of 2020.”

For the year 2020, Udell added, “with our build rate in the first quarter, we are on track with our overall plan to upgrade at least 300,000 locations in 2021.”

Maintaining Fiber, Installation Capex

As Consolidated moves forward with its FTTH buildout plans, it has developed a plan to initially target communities and homes that are easy to install.

The telco likely will string fiber on existing utility poles where it has facilities today to get to homes and businesses with fiber.

“We're dealing with the lower-hanging fruit, if you will, in the places that we could move most quickly in order to get the machine running,” Udell said.

He added that capex costs could increase as Consolidated has to install fiber in underground facilities, particularly in norther New England “where we know we'll have some duct work and repairs to do.”

Specifically, the telco expects capex costs to be in the range of $450 per home and between $500 and $550 in some areas where it has done what it calls “varied work.”

“On the average, it will move toward that 500 [dollar] number as we progress through the year,” Udell said.

In areas where Consolidated is signing up customers in advance for service, the challenge is procuring Wi-Fi equipment and components.

“Because we don't have all the Wi-Fi gear that we want from an experienced perspective, we're in the $400 to $450 range on the install. The installs are going fairly quickly,” Udell said. “It's a lot more efficient of an install. It's primarily plug and play, and so we're looking at ways to continue to tweak the talent pool that we've put on that.”

Despite the issues with Wi-Fi procurement, Consolidated remains confident that it will ramp up FTTH installations.

The service provider has about 70,000 new installations planned for the second quarter.

From there, Udell said it plans to ramp through the end of the year, but in northern New England the pace of builds will “be weather-dependent in the fourth quarter to a certain degree.”  

He added that Consolidated also will be expanding its service reach in warm- climate markets, such as Texas and California, “where we can continue to get passings in the tougher winter months.”

FTTH Penetration Rises

As Consolidated rolls out FTTH into more markets, it finds penetration is rising steadily. Penetration rates vary according to the dynamics of how long it has offered FTTH in a market. 

In markets where homes have had a gigabit fiber-based product, penetration is above 35 to 36 percent.

However, in new markets, such as northern New England, where it has been more difficult to do door-to-door sales, Consolidated is seeing a three-year penetration transition: 15 to 20 percent in the first year, high 20 percent in the second year and the mid-30 percent range in the third year.

Udell said in its more established markets, Consolidated’s penetration rates of FTTH are even higher.

“In the areas where we've got longtime history, in the mid-South and the longer-term fiber gigabit areas in the West Coast, we're in the 36 percent, 40 percent, 42 percent range,” he said.

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