FairPoint reaches 1,110 cell sites with fiber, looks toward small cell opportunities

FairPoint Communications continues to make progress with its northern New England wireless backhaul plans, announcing during its fourth-quarter earnings call that it has reached 1,100 cell towers with fiber while preparing for new small cell opportunities.

"We continue to add to our fiber to the tower counts in the quarter, ending the year with nearly 1,100 towers connected with fiber and over 1,700 connections," said Paul Sunu, CEO of FairPoint, during the earnings call, according to a Seeking Alpha transcript.

Despite seeing overall growth in fiber-to-the-tower (FTTT) connections, FairPoint did suffer some setbacks as some of its wireless operator customers delayed buying decisions on some of the towers in its footprint.

"In the third quarter we talked about the fact that some of these towers are being delayed," Sunu said. "That was really being delayed by the carrier choice, it wasn't on our part. We met our commitment during the quarter in terms of delivering connections to these towers even with the strike and the bad weather."

Sunu added that "we've got a tower schedule to go in 2015 as well," but "it's just not as large as it's been because the predominant amount of these towers has already now been done."

Stopping short of announcing any specific plans or deals, Sunu said that with the majority of its towers being built out, it is now looking for new small cell opportunities.

"I think what's out there is what's going to happen with small cell technology, I think we're fairly well positioned to be able to deal with that," Sunu said. "So again it depends on the way the carriers are going to architect this, but I think we're fairly flexible and hopefully we can be a good partner for them as we were working through our cell tower backlog."

Wireless backhaul gains also had a direct effect on FairPoint's Ethernet revenues for the quarter.

By completing the fiber builds to new towers, the service provider reported that it saw a 32.8 percent year-over-year rise in retail and wholesale circuits. Overall Ethernet service revenues contributed about $21.5 million of revenue or 9.9 percent of total revenue in the fourth quarter of 2014, up from $18.9 million or 8.9 percent of total revenue in 2013.

As of the end of the quarter, FairPoint had a total of 12,638 Ethernet circuits, up from 11,681 in the third quarter of 2014, with retail and wholesale Ethernet circuits rising to 5,611 and 7,027, respectively.

Being aggressive with fiber-based wireless backhaul will be key for FairPoint, particularly as it is now facing competition from Comcast Business (NASDAQ: CMCSA), which has been continually expanding its fiber footprint into the same northern New England footprint that it serves with retail and wholesale Ethernet services. Comcast Business just announced this week that it deepened its fiber and Ethernet service suite available to businesses in three New Hampshire and Vermont communities.

For more:
- see the Seeking Alpha earnings transcript (reg. req.)

Related articles:
FairPoint loses $43M in Q4 due to weather, labor strike
Comcast Business challenges FairPoint by deepening New Hampshire, Vermont Ethernet reach
NLRB rejects union challenges to FairPoint's contract proposals
FairPoint says vandalism on network has spiked during union strike
FairPoint puts contingency plans in place during northern New England labor strike