Also today, an update and earnings from Windstream, GCI Liberty's numbers, Zayo digs deep into dark fiber (again), most devices speak WiFi and Hoosiers Gov writes a big check for broadband.
It seems to be a good match so far: On the one-year anniversary of its acquisition of Hawaii Telecom, Cincinnati Bell reported Q2 revenue of $384 million, up 29%. Adjusted EBITDA rose 6%, to $103 million, compared with the prior quarter. FTTP net activations totaled 3,200 in Cincinnati and 1,000 in Hawaii in the most recently completed quarter. For its part, Hawaiian Telecom's Q2 revenue was $88 million, with adjusted EBITDA of $13 million, an increase of 4% sequentially. Full details are here. (See Cincinnati Telecom Seals Deal on Hawaii's Treasures: Fiber, Cloud, IT.)
Reading Between the Lines
Earnings season continues to sizzle this summer. (Source: Adeolu Eletu on Unsplash)
Windstream expanded its Kinetic broadband customer base for the fifth consecutive quarter, adding 1,900 subs in Q2. Adjusted sales and revenue totaled $1.29 billion versus $1.4 billion in the same period 12 months prior. Adjusted services revenue reached $1.27 billion, compared with $1.38 billion year-over-year. Adjusted capex hit $215 million compared to $181 million a year ago; Kinetic service revenue was $509 million, down 4% from the same period a year ago. Windstream is working to emerge from restructuring. During the most recent quarter, a judge approved the provider's request to appoint a mediator to oversee negotiations between Windstream, Uniti and other key Windstream stakeholders. Windstream filed a complaint against Uniti in late July.
GCI Liberty on Thursday reported Q2 2019 total revenue of $211 million, down 3% from $218.4 million in the prior quarter. Consumer data revenues grew 6%, to $41.5 million in the three-month period ended June 30, 2019, versus $39.2 million in Q1 2019. However, business data revenues fell 8%, to $64.6 million in Q2 2019 compared with $70.2 in the prior quarter. Total consumer revenue dropped 2% and business revenue decreased 5%, quarter-to-quarter. GCI announced plans with Ericsson to bring a 5G network to Anchorage by year-end 2020. The Alaska operator participates in several Universal Service Fund initiatives, including the USF Rural Health Care program, which subsidizes rates for rural medical providers. GCI's RHC support payments were reduced about 26%, or almost $28 million, for the 2017 funding year -- a decision GCI unsuccessfully appealed, which impacted Q2 financials and beyond. Separately, GCI had a similar unfavorable decision regarding a different subsidized customer, resulting in a GCI reserve of $21 million and an associated bad debt expense, the company said.
Zayo Group this week unveiled plans for a new long-haul fiber network between Salt Lake City and Denver. Construction, which began last quarter, is scheduled to end in 2021. The fiber-build will span more than 500 route miles alongside Interstate 70, and will become part of Zayo's 1,600-route-mile Denver fiber footprint. This dark fiber connects Chicago, Dallas and San Francisco. Zayo's Utah presence extends about 1,200 miles, it said.
WiFi has become the standard language for smart-home devices, new research from Strategy Analytics found. Nearly 5 billion home WiFi devices are in use worldwide today, and a surge in demand for new devices will propel adoption to 17 billion by 2030, the report said. The leading WiFi standard today is WiFi 5 (802.11ac), which accounts for about 75% of 2019 sales to-date. However, recently introduced standard WiFi 6 will represent one-third of device sales by 2023 and is expected to dominate the market in the late 2020s, Strategy Analytics predicted. Most, if not all, operator-focused platforms and connected-home solutions use WiFi as their standard for home and mesh networks.
Governor Eric Holcomb announced 11 expansion projects will receive $22.1 million in funding as part of Indiana's $1 billion Next Level Connections infrastructure initiative. The expansion project will establish infrastructure for more than 4,800 currently unserved residential and commercial premises in 12 counties, in primarily rural regions of the Hoosier state. Some operators involved in the project include Miles Communication, Washington County Rural Telephone Coop, Smithville Communications, LigTel Communications and Perry-Spencer Rural Telephone Coop.
Over the next two years, approximately 60% of service providers (both large and small) will adopt virtualization on a wide scale across their networks, according to the latest survey report from Ovum. Why are providers making these moves? Is there an easy way to start?
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