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Consolidated plans marketing campaign in support of fiber buildout

Consolidated Communications CEO Bob Udell said the company is on track to reach its fiber buildout goal for 2021. And he hinted that the company is preparing to unveil a big, new advertising campaign that he hopes will accelerate Consolidated's fiber customer gains.

"We will roll out a new brand representing a superior fiber product and a transformative customer experience, giving customers exactly what they have been asking for from their broadband service provider," he said during the company's recent quarterly conference call, according to a Seeking Alpha transcript of the event. He added that the campaign is scheduled to launch in the middle of November, and could also include a refreshed pricing, sales and installation strategy involving mesh Wi-Fi, digital sign-up tools and "an extremely competitive price point for symmetrical gig internet."

Continued Udell: "We are very excited to launch our new brand within the next 30 days and the differentiated customer experience, which it represents, which will enable us to become the broadband provider of choice."

Since inking a $425 million deal with private investment firm Searchlight Capital Partners last year, Consolidated has been making progress on its five-year plan to upgrade parts of its aging DSL network with fiber. The company's ultimate goal is to offer speedy connections to 1.6 million locations in California, Minnesota, Texas, Illinois, Pennsylvania, Vermont, New Hampshire and Maine – roughly 70% of its current network – with XGS-PON fiber technology by 2026.

So far Consolidated said it is on pace to cover 300,000 locations with fiber by the end of this year. The average cost to the company to reach each of those locations is about $550. Next year it hopes to raise that buildout number to 400,000.

Based on its initial findings, the company expects at least 40% of potential covered customers in those areas to sign up for its services. That would represent a competitive threat to the likes of Comcast and Charter Communications that currently offer cable Internet services in some of those locations.

In its most recent quarter, Consolidated said it added around 4,000 gigabit fiber customers, helping to raise its consumer broadband revenue by 2.1% and its consumer data average revenue per user by 7.3%. Overall, Consolidated counts around 500,000 total consumer customers.

Based on that performance, Consolidated's executives believe the company can return to overall revenue growth in 2023.

However, Consolidated is facing the same kinds of supply constraints that have affected other fiber companies including AT&T.

As a result of the situation, the company raised its capital expenses for 2021 to a high end of $460 million, from a previous high end of $420 million. Company officials said the extra money would help them secure more Wi-Fi 5 products for in-home Wi-Fi amid potential shortages of Wi-Fi 6 equipment.

Broadly, Consolidated is one of a number of fiber providers in the US that is working to dramatically expand the reach of its fiber network, partly in response to a pandemic that highlighted the value of speedy in-home Internet connections. Further, such buildouts could soon be supercharged by billions of dollars in additional government funding for such networks.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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