Texas-based Ezee Fiber may be less than a year old, but the company already has its sights set on a rapid expansion of its nascent fiber-to-the-home (FTTH) footprint and the potential acquisition of competitors operating in the Houston area.
CEO Scott Widham told Fierce Ezee Fiber was formed in mid-2021 after private equity firm I Squared Capital purchased ICTX WaveMedia, a connectivity provider with a 2,000 kilometer fiber network. Since that deal Widham said the company has been working up a plan to monetize ICTX’s assets through a focus on five key segments.
The first of these is a residential fiber initiative, which Widham characterized as an emerging business for the company but one it plans to put plenty of cash behind. This year, Ezee Fiber will spend $25 million to build out a GPON FTTH network to 26,000 locations, with around 12,000 of these expected to be lit up by summer. Its service will be up against offerings from the likes of AT&T and Comcast, Widham said.
He stated the company is expecting penetration of around 10% one year after deployment and north of 30% once its markets start to mature. Widham added Ezee Fiber is also working on an overhaul of its OSS and BSS systems to support the new network, installing Oracle’s Netsuite to replace a legacy software system that was built in-house.
While it’s focused on Houston for the time being, Widham said the company plans to “inch out” from there and look for cities which want to partner with it to bring faster broadband to town.
“We’re having those conversations real time with a number of cities,” he stated. “I think over time if we get really ambitious I could see us building in all the DASH markets – Dallas, Austin, San Antonio and Houston – because all of those cities are growing like crazy.”
The CEO said in many cases it’ll likely be cheaper to build its way to a bigger footprint rather than buying rivals. But he noted it will strategically pursue deals with Houston-area competitors, whether that means purchasing them outright or buying a stake in their business.
“Houston’s probably the only NFL city I can think of that still has fragmented fiber ownership. There’s probably five or six guys still in this market, all the other markets seem to have been gobbled up,” he explained. “We do have a bit of a war chest and if we get lucky we’ll run the table with some of our friends and build a really big company.”
Another key segment for the company is its GEM business focused on serving government, education and medical clients with custom dark fiber products. Widham highlighted this as the company’s “fastest growing business” and tipped it to turn into a real money-maker as Ezee expands its customer base.
“The GEM business will be a huge business for us because we’re able to charge large installation rates…but then we can also charge O&M – operation and maintenance – over time,” he said. “So it’s not only a big upfront payment which is great that covers our cost of construction, but then there’s a recurring revenue stream that could be 20 years.”
Rounding out its segment lineup are Ezee Fiber’s commercial, fiber-to-the-tower (FTTT) and wholesale businesses. In wholesale, the company provides termination services to around 35,000 locations for major operators such as Verizon, Windstream and Lumen. Its FTTT business provides operators with access to 190 towers.
In term of revenue distribution, the GEM segment currently accounts for 40% of sales, with Commercial close behind at 36%. The company’s FTTH, Wholesale and FTTT businesses make up 10%, 8% and 6% of revenue, respectively. This is expected to change over the coming years to more heavily favor FTTH as that business rapidly expands.
Between its different units, Widham said Ezee Fiber expects to double its overall revenue this year compared to 2021 and double it again from 2022 to 2023.