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Broadband services

GigaMonster May Go on M&A Tear

With $45 million more in the coffers and an acquisition in the books, GigaMonster, a startup focused on broadband services for apartment buildings and other multiple-dwelling units (MDUs), is looking to broaden its US horizons.

And it may use even more M&A to achieve it.

It's "very possible" that GigaMonster will make more M&A moves this year, Bill Dodd, GigaMonster's chairman and CEO, said.

Though organic growth is key to the company's plan, seeking out strategic acquisitions, he added, will enable GigaMonster to not only accelerate its expansion in some markets but also enable the company to serve those areas more effectively from a cost perspective.

The most recent example is GigaMonster's just-completed deal for Fibersphere Communications, which will be used to help the company accelerate its presence in the Pacific coast region. (See GigaMonster Lands $45M More, Merges With Fibersphere .)

GigaMonster markets a handful of uncapped speed tiers, up to 1-Gig, with pricing that aims to undercut competitors in its individual markets.
GigaMonster markets a handful of uncapped speed tiers, up to 1-Gig, with pricing that aims to undercut competitors in its individual markets.

More generally, the new round of funding will be used by GigaMonster to expand and build on the 25 markets it's in today. The company won't reveal the number of communities it serves, but they are in the "hundreds" of them, including more than 100 in GigaMonster's hometown of Atlanta alone, Dodd said.

GigaMonster has a small and growing business for the commercial/hospitality sector, but its primary focus and specialty is delivering broadband service up to 1 Gbit/s to MDUs unshackled by long-term contracts and data usage caps. It also has a small but growing commercial services business.

"Those things that make you hate your Internet provider, we've eliminated that," said Dodd, in reference to the contracts and data caps bit, noting that the approach is designed to appeal particularly to the 25- to 35-year-old demographic of apartment and condo renters.

Depending on the building, GigaMonster tends to cross swords with incumbent telcos and cable operators that are also competing to deliver service to tenants. However, "bulk" business models involving exclusive arrangements with a service provider are gaining momentum, said Dodd, who formerly was president and CEO of DirecPath, an MDU-focused Internet services specialist that has ties to DirecTV.

"That's where the greatest opportunity is for [building] owners," he said, adding that the model also puts more pressure on service providers. "You have to be better than the best to be the only choice in a community."

GigaMonster's technology play centers on providing dedicated fiber links to the building it services and will rewire those buildings if it's needed to support speeds up to 1-Gig. The go-to option is to strike long-term leases for existing fiber, but will also do fiber construction when the circumstances call for it.

"There's still a tremendous amount of unused fiber in this country," Dodd said. "We always try to utilize existing fiber that we can control end-to-end."

Though fiber and the use of GPON and active Ethernet are among the main technologies used by GigaMonster, there are some limited deployments with DOCSIS-based systems. But DOCSIS is not going to be core to the company's tech strategy on a going-forward basis. "I'm not a big fan" of DOCSIS, Dodd said.

GigaMonster is also testing Gfast, "but to date, we have not had a need to deploy it," the company said in a statement. (See BT's Openreach Hits Brakes on Gfast Rollout.)

"We're unique in that we carry a handful of platforms to meet the needs of the community," Dodd said.

GigaMonster offers five symmetrical and uncapped speed tiers (50 Mbit/s, 100 Mbit/s, 250 Mbit/s, 500 Mbit/s and 1 Gbit/s), with pricing that varies by market depending on the competitive makeup there.

"Gig service today is table stakes," Dodd said, suggesting that GigaMonster could go higher than 1-Gig if the market demands it.

The $45 million raise with Post Road Group announced this week was GigaMonster's third capital raise, but the company is not disclosing how much it has raised since its founding in April 2015.

— Jeff Baumgartner, Senior Editor, Light Reading

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