Shentel surpasses 100K fiber passings, lines up 317K more

Regional U.S. operator Shenandoah Telecommunications (Shentel) grew revenue 8.8% in Q2 2022 as its Glo Fiber business thrived, but its net loss doubled as it took a financial hit from the decommissioning of unprofitable Beam fixed wireless access sites.

During the quarter, Shentel’s Glof Fiber unit chugged past the 100,000 passings milestone, adding 19,000 new locations to reach a total of approximately 113,000. CEO Chris French on an earnings call also announced it signed agreements for 72,000 additional franchise passings, increasing its total number of franchise and government grant award passings to 430,000. The latter figure represents 89%  of the 482,000 passings Shentel said it is aiming to reach by 2026. Its construction backlog currently stands at 317,000 locations.

Shentel has repeatedly raised its 2026 passings target, first increasing it from 300,000 to 450,000 locations late last year. It appears to have subsequently raised that to a total of 482,000 passings, inclusive of 32,000 locations it plans to reach using money from government grants.

COO Ed McKay said on the call the new franchise passings include locations in Shippensburg, Greencastle and Waynesboro, Pennsylvania; Ashland, Virginia; and Sussex County, Delaware. He added construction of previously announced passings is underway in Lancaster and York Counties in Pennsylvania as well as in Williamsburg and Suffolk Counties in Virginia, with these markets set to be launched in the back half of the year.

All told, the operator said it is confident in its ability to reach 150,000 fiber passings by the end of this year and more than 250,000 by the end of 2023.

Consolidated revenue in Q2 grew 8.8% year on year to $66 million, thanks in large part to nearly 139% growth in Glo Fiber sales. However, the company’s net loss jumped from $1.6 million to $3.2 million, which it attributed “primarily to impairment and restructuring charges related to the decommissioning” of the aforementioned Beam sites.

Overall broadband revenue across fiber and cable grew 9.2% to $61.4 million. Residential and SMB revenue increased 8.9% to $47.9 million while commercial fiber revenue grew 9.4% to $9.3 million due primarily to growth in circuits.

McKay said in late July Shentel inked a 7-year deal with T-Mobile to extend backhaul services to 175 sites. While it expects T-Mobile to terminate the backhaul contracts for around 365 other circuits, McKay said this will generate early termination fees of between $3 million and $3.6 million. He added Shentel believes “there is significant opportunity for additional backhaul revenue as we build fiber into T-Mobile switching centers and have the opportunity to bid on backhaul for additional cell sites as we expand our Glo Fiber network.”