WideOpenWest's (WOW's) new mobile service is off to the races. But it's apparently still too early for the company to supply any initial, tangible results from the effort.
WOW soft-launched its mobile service, developed in partnership with Reach Mobile, to four markets in early June, then followed with a launch across its footprint in late July. That rollout cadence meant the service, branded as WOW! Mobile powered by Reach and targeted to WOW's broadband subs, was available for less than a month before WOW wrapped up its second quarter.
"Some customers are starting to avail themselves of that service," WOW CEO Teresa Elder said on the company's recent Q2 2022 earnings call. "It is definitely an opportunity for customers to get a discounted bundle with broadband and mobile from WOW. We're just kind of starting with a toe in the water there – but so far, so good."
WOW's initial mobile offering features a mix of shared and unlimited data plans that include unlimited voice and text. WOW's Basic tier starts at $15 per month per line, on up to an Unlimited tier that costs $45 for the first line, and $40 per month if more than two lines are baked into the package. WOW is also offering a $10 monthly discount to customers who bundle home broadband with mobile.
Reduced broadband sub growth for full 2022
Elder said a majority of new customers are taking speed tiers of 500 Mbit/s or more, with 85% of new subs taking speeds of 200 Mbit/s or more. That trend, coupled with a small rate increase in March, raised WOW's high-speed data (HSD) average revenue per user (ARPU) to $66.30.
WOW expects to add broadband subs for full-year 2022, but lowered both broadband subscriber and revenue expectations.
WOW now expects full-year HSD revenues of $415 million to $419 million, down from an original guidance of $427 million to $430 million, with the offset due in part to an increase in promotional activity. The company also expects to add between 12,000 to 15,000 HSD subs for the full year, down from an original expectation of 14,000 to 17,000.
WOW's overall growth strategy largely hinges on edge-outs (network builds to areas adjacent to existing infrastructure) and a more recent greenfield initiative that is targeting fiber-to-the-premises (FTTP) buildouts to about 400,000 homes passed by 2027, a move that stands to expand WOW's footprint by 21%.
Greenfield construction started to "ramp up" in Q2, contributing $4.5 million of additional spend, CFO John Rego said. WOW is funding its greenfield plan via cash from operations.
WOW has started greenfield network construction in parts of Central Florida, and is "preparing to put shovels in the ground in Greenville County, South Carolina," Elder said.
Company execs were not asked to comment on a recent rumor that WOW is in "exclusive talks" to be acquired by Morgan Stanley Infrastructure Partners (MSIP). Rumors that WOW was exploring a sale first surfaced in April.
Some analysts are starting to wonder if WOW will indeed find a suitor. "[I]f another 1-2 months pass without any traction on reported takeout talks, we would view it as a sign that negotiations have stalled – if not ended – with all potentially interested buyers for the time being," B. Riley Securities analyst Daniel Day explained in a research note released after WOW reported Q2 results.
- WOW in exclusive M&A talks with Morgan Stanley infrastructure unit – report
- WOW exploring possible sale – report
- WOW launches mobile service with Reach across footprint
- WideOpenWest soft launches mobile service
- WOW nears mobile launch, doubles greenfield fiber buildout commitment
— Jeff Baumgartner, Senior Editor, Light Reading