Consolidated Communications revealed plans to slow the pace of its fiber build and ramp its marketing efforts to boost penetration in 2023, as it works toward a goal of achieving year on year EBITDA and revenue growth in 2024.
The operator ended 2022 with fiber deployments in 8 of the 22 states in its territory and 123,000 fiber connections. It added 60,700 passings in Q4 and 403,000 for the full year, crossing the 1 million passings mark on its way to a goal of 1.6 million or 70% of its footprint. Fiber now accounts for 38% of its 2.6 million total passings. Consolidated said it’s aiming to boost that number to 50% by the end of 2023 with the addition of a minimum of 225,000 passings.
CEO Bob Udell acknowledged the build pace marks a slowdown from 2021 and 2022. However, he said this will allow it to focus on driving penetration in completed markets, benefit from fiber revenue growth and capitalize on grant opportunities that align with its build plans.
“We are going to do some marketing tests, some regional diversity and strategy focused on maximizing our penetrations and build out a re-rally team that will allow us to be more aggressive in the base after the first wave from a construction perspective,” he stated.
On the grant front, the CEO noted that Consolidated has won $150 million in grant funding since 2019 and plans to chase another $100 million.
Its expansion plans for 2023 include the addition of at least 19,000 subsidized new passings in Vermont. Earlier this week, the operator won a pair of grants in Maine totaling nearly $17 million to help it reach 15,800 new locations there. The projects will supplement earlier subsidized builds in the state covering 22,000 homes which are set to be completed this spring.
The operator also expects to begin construction on a project in New Hampshire late in 2023 which will eventually see it cover 57,000 new locations there.
Q4 by the numbers
Overall revenue fell 7.1% year on year to $296 million, though revenue adjusted to account for the sale of its Ohio and Kansas assets last year was down only 5.2% to $288.3 million. Consumer revenue of $115 million was down year on year as gains in Consolidated’s broadband segment failed to offset revenue slides in its voice and video businesses. Commercial revenue also fell by nearly $4.5 million to $101.7 million.
Consumer fiber revenue specifically was up 49% to $24 million, thanks in part to the net addition of 10,600 subscribers in Q4. Overall, though, it lost 184 broadband subscribers as copper and DSL losses more than offset its fiber gains.
The operator's net loss of $35 million compared to a profit of $15 million in Q4 2021.