Shenandoah Telecommunications (Shentel) boasted an increase in Glo Fiber passings for the first quarter, driven by the operator’s continued network expansion across the Mid-Atlantic.
On Friday’s earnings call, CEO Chris French said Shentel added more than 17,500 Glo Fiber passings in Q1, bringing the overall passings count to just over 165,000 – a 76% year-over-year increase from roughly 94,000 passings in the first quarter of 2022.
Glo Fiber’s customer base reached almost 29,000 at the end of March, with Shentel counting 4,507 customer net additions in Q1 – a nearly 88% YoY increase. French added Glo Fiber revenue, which more than doubled to $7 million, helped achieve an “all-time high” for Shentel’s quarterly broadband segment revenue of $67.2 million.
“We now have a critical mass of Glo Fiber markets with construction substantially complete, where we can drive up gross margins as we add customers with very little incremental network expense,” he said.
In February, Shentel disclosed Glo Fiber is already live in 17 greenfield markets. For 2023, it’s looking to light up six markets across Delaware, Maryland, Pennsylvania and Virginia.
Additionally, Shentel is targeting State College, Pennsylvania, as its newest Glo Fiber market. Engineering work is currently underway in the area, according to COO Ed McKay, with construction beginning in 2024. Shentel will deploy its network to over 15,000 homes and businesses in the borough and adjacent townships.
Fuel from franchise agreements
McKay highlighted Glo Fiber’s franchise agreements as a catalyst for growth. Thus far, Shentel has franchise agreements with 60 municipalities in 24 markets across five states.
In terms of subsidized builds, Shentel to-date has received over $81 million in grants, which will allow the company to extend its service to more than 25,000 unserved locations, said McKay. Shentel in Q1 added approximately 200 government subsidized fiber passings, which are factored into the company’s overall passings count.
All told, Shentel now has 460,000 approved Glo Fiber passings due to franchise agreements. McKay said that figure is “more than enough” for Shentel’s target of constructing 450,000 new greenfield passings by 2026.
“Our construction backlog remains very robust with 317,000 additional passings approved for construction,” he added. “As we ramp up construction, our data penetration in existing Glo Fiber markets is accelerating as well.”
Shentel this quarter also rolled out symmetrical 5-gig service, making the tier available in all areas where it currently offers Glo Fiber. McKay noted roughly 42% of new residential subs adopted speeds of 1 Gbps or higher in Q1, with around 5% taking speeds at or above 2 Gbps.
Financials
Consolidated revenue grew 11.3% year-over-year to $71.7 million, driven by a 12.5% increase in broadband segment revenue. However, revenue growth was partially offset by a 5.6% decline in Shentel’s tower segment.
The company ended the quarter with 28,793 Glo Fiber subscribers and 109,920 cable subscribers, compared to 13,783 fiber and 107,291 cable customers in Q1 2022.