Shentel’s fiber revenues boost third-quarter wireline results 6% to $19M

Shentel’s wireline division third-quarter revenues rose 6% to $19.9 million year-over-year as the telco continues to see the fruits of strong fiber sales to carriers and enterprise customers in its region.

Earle MacKenzie, COO of Shentel told investors during its third-quarter earnings call that wireline and cable fiber lease revenues reached $12.3 million, up 12.8% from the third-quarter of 2016.

“We saw a 15% increase in fiber revenue from the same period last year with the growth in both affiliated and nonaffiliated revenue,” MacKenzie said during the earnings call, according to a Seeking Alpha transcript. “New fibers contracts signed in the third quarter were up over 70% from the same quarter 2016.”

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Carrier access and fiber revenue for the third quarter of 2017 was $13.2 million, up 6.9% from the same quarter last year, primarily due to new fiber contracts. Specifically, cable fiber revenues were $1.6 million while wireline fiber contract revenue were $10.6 million for the quarter.

The service provider is also seeing positive trends in the consumer side of the wireline business with lower access line declines and ongoing transition to higher speed cable modem-based broadband services.

Increases in broadband service revenue offset the loss of regulated voice service revenue. Operating expenses increased 5.9% or $0.8 million to $14.8 million for third quarter 2017, primarily due to costs to support new fiber contracts.

“We're seeing a slowdown in access line losses. It has been two years since we ceased requiring our regulated telephone customers to have a voice access line to get broadband,” MacKenzie said. “We continue to see growth in high speed broadband users with the growth in cable modem which is available in over two thirds of our regulated telephone service area.”

Adjusted OIBDA in the Wireline segment for third quarter 2017 was $8.4 million, as compared to $7.7 million in third quarter 2016.

From an overall financial perspective, Shentel’s total third-quarter revenues were $151.8 million, down 3.2% compared to $156.8 million for the same period a year ago.