WideOpenWest (WOW!) upped the ante with its fiber build, announcing plans to double its investment in greenfield deployments to reach twice as many homes over the coming years.
The operator previously outlined plans to spend $160 million to reach 200,000 new locations with fiber by 2025. At the time, it said it might bump up its target to 400,000 locations by 2027 if its initial rollouts were successful. WOW! subsequently announced greenfield builds in two Florida counties – Seminole and Orange – which would deliver broadband service to a combined 100,000 locations at a cost of around $100 million.
WOW! on Monday locked in the higher deployment target and said it now expects to reach around 150,000 locations in its two initial Florida markets. It added it will hit another nearly 30,000 via a third greenfield deployment in Greenville County, South Carolina. The operator plans to pump more than $30 million into the Greenville project.
All told, it’s now looking to spend $400 million to reach 400,000 new locations and increase its total number of passings by 21%.
Speaking on an earnings call about the decision to step up its target, CEO Teresa Elder said “everything that we’ve see in that market has just reinforced what a great decision that will be. I would certainly point to the great penetration growth that we’re seeing in the edge outs, especially the most recent vintage of 2021.”
CFO John Rego noted the operator plans to fund the $400 million solely through cash generated by its business. He added, however, that it has leeway to increase its leverage slightly if an “amazing opportunity” presents itself to go beyond its new target.
In light of its updated plan, WOW! increased its long-term growth estimates. It now expects high-speed data (HSD) revenue to ramp at a compound annual growth rate (CAGR) of 11% to 12% between 2021 and 2025, up from a previous range of 9% to 10%. Additionally, it forecast total revenue will grow at a CAGR of 2.5% to 3% over the same period, up from its previous estimate of 1% to 1.5%.
Q1 metrics
Consolidated revenue fell 3.8% to $174.6 million in Q1. HSD revenue grew 3.6% to $101.1 million, but the gain was more than offset by a 13.8% drop in video revenue to $48.6 million and an 11.3% slide in telephony revenue to $13.3 million. However, the company managed to swing from a net loss of $22.7 million in Q1 2021 to a profit of $5.7 million in the recent period.
The operator added 3,300 HSD customers in Q1, increasing its total to 515,000. The total number of subscribers across all its business units was 534,700.