Regional U.S. operator Shenandoah Telecommunications (Shentel) deployed fiber to 46,000 new locations last year and is looking to up that figure to 75,000 in 2022 as it continues an ambitious multi-year expansion of its footprint.
Shentel ended 2021 with a total of 75,000 Glo Fiber passings and last year launched 8 new markets to raise its total active to 12. On an earnings call, Shentel COO Ed McKay said the operator is on track to double the number of passings to 150,000 this year.
“In addition to expansion of our existing markets, engineering and construction work is underway in five additional markets that we plan to launch in 2022,” he stated. The operator’s earnings presentation indicated these will include two markets in Pennsylvania and three in Virginia.
Shentel expects to invest between $220 million and $240 million in capital expenditures this year, with $165 million to $175 million of that dedicated to its Glo Fiber expansion, McKay said. That investment compares to the $82.2 million is spent on Glo in 2021.
McKay added it plans to ramp construction further to hit 100,000 new passings in 2023 as it works to reach a previously announced fiber goal of 450,000 by 2026.
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Shentel grew its Glo Fiber subscriber base 173.6% in 2021 to 11,377, and its overall broadband base (which includes cable and fixed wireless access) 15.9% to 119,197. Its cable division added 7,278 customers while its Beam fixed wireless service gained 1,376 last year. Its integrated broadband network spanned 314,000 passings and penetration for its cable, Glo Fiber and Beam services stood at 50%, 15% and 5%, respectively as of the end of the year.
Consolidated revenue grew 7.7% in Q4 to $62.6 million, with broadband revenue up 9.4% to $58.8 million and tower revenue down 12.9% to $4 million. Full year consolidated revenue was up 11.1% to $245.2 million, with broadband revenue up 11.6% to $228.1 million and tower revenue increasing 3.8% to $17.7 million. Net income from continuing operations came in at $7.9 million for the full year.
Tower business
Shentel CFO Jim Volk said the operator wasn’t providing revenue or EBITDA guidance for 2022, partly due to uncertainty related to T-Mobile’s plan to decommission Sprint’s legacy CDMA network later this month. He noted T-Mobile is its tower business’ largest customer, generating around $20 million in annual revenue through tower leases and its purchase of fiber backhaul.
Volk said Shentel expects around 80 towers to churn as a result of T-Mobile’s decommissioning work but does “not have visibility into the number of backhaul transport circuits that could be part of the rationalization.” That said, Volk stated Shentel expects annual revenue churn from T-Mobile to be in the $7 million to $9 million range.
“Despite these T-Mobile headwinds, our Glo Fiber expansion strategy provides a significant incremental subscriber penetration opportunity that is well above pure play cable companies and will provide us sustainable revenue growth for several years,” he concluded.