Private equity-backed Surf Internet is just about ready to paddle out for the big one. After beefing up its executive team and stocking up on materials, the regional operator is now preparing to undertake a massive expansion of its network in its territory around Lake Michigan.
Though the name may be unfamiliar, the operator has been around in some form for more than 20 years, starting off as MapleNet back in 2001. It made a string of acquisitions after 2010 and today comprises a blend of between 8 and 10 different organizations. Last year, the company was itself bought by private equity firms Bain Capital and Post Road Group and in July of this year it rebranded from Surf Broadband Solutions to Surf Internet.
CEO Gene Crusie told Fierce Surf Internet currently serves around 24,000 customers across Indiana, Illinois and Michigan with fiber and fixed wireless access. By the end of 2022, Crusie said Surf expects to have between 70,000 and 80,000 fiber passings. But with backing from its private equity owners, the company is looking to more than double that figure over the next two years.
According to Crusie, Surf is initially aiming to push fiber to more than 120,000 new locations, at a rate of between 50,000 and 70,000 passings per year. Engineering work on these is already in progress, he said. Additionally, the company has received government funding to cover an another 5,000 passings or so. It is also eyeing an additional 100,000-plus passings that it plans to tackle after 2024.
Beyond the aforementioned engineering work, Crusie said much of this year has been spent laying the groundwork for its forthcoming build.
“2022 has for the organization been a year of building our base, which is establishing the processes and procedures, building the bench in terms of the team,” he explained, noting its C-suite includes former Vexus Fiber and WideOpenWest executives. “The team has grown by about 25% this year in terms of headcount to prepare to scale the operations in the near future.”
The company has also stocked up on materials as part of its preparations, with Crusie stating it expects a supply crunch will accompany the billions of dollars in government funding that will begin flowing in earnest next year. Currently, he said Surf has enough stock to “carry us well into our build plan for next year.”
Though its network currently uses GPON technology, Crusie revealed it is “rapidly moving towards XGS-PON" and has a roadmap to expand its service tiers beyond 1-gig into multi-gig territory. In terms of competition, Surf is up against Frontier Communications, Comcast, Mediacom, CenturyLink and AT&T. However, Crusie noted it hasn’t really run into fiber overbuilders – at least not yet.
Frontier is working to reach 10 million locations with fiber by the end of 2025. While it hasn’t provided much detail about where it is building, executives noted on a recent earnings call Frontier expects work to be underway in 12 of the more than two dozen states where it operates by the end of this year.
Meanwhile, Brightspeed, which is set to take over Lumen’s ILEC assets in 20 states later this year, has announced plans to build fiber to 74,000 locations across Indiana, Illinois and Michigan by the end of 2023. Illinois also factors into Consolidated Communications’ Fidium Fiber expansion plan. Clearwave Fiber, a joint venture from Cable One and several partners, is also looking to push fiber deeper into Illinois and Indiana.
“We’re very strategic about what markets we pick, where we think they might be a little bit small for some of the ILECs to build…but they’re big enough to be sufficiently meaningful to us and they’re definitely transforming the community,” Crusie said of Surf’s plans. He concluded the operator believes its local presence and focus on the communities it serves will help it stand out from the pack and “get our fair share of the market.”