Communications Sales & Leasing (CS&L) says its new Uniti Fiber division is seeing growing interest from its wireless and enterprise customers for dark fiber.
Senior Editor, Sean Buckley with FierceTelecom reported on CS&L’s third quarter earnings call recently. In the article Buckley writes that CS&L’s Uniti Fiber division is finding growing success. He shares that Kenny Gunderman, CEO of CS&L, told investors that customer reception of the Uniti Fiber division continues to “exceed our expectations.”
“We’re seeing a steady increase of new wins, including dark fiber and our pipeline of awarded sites pending contract, is growing,” Gunderman said.
The post dated November 14, 2016 goes on to say that during the quarter, Uniti Fiber won a big dark fiber deal serving a large wireless operator, prompting it to expand its reach in three markets in Southeast Iowa and the Central and Northern Illinois regions, for example.
Leveraging assets it purchased from its acquisition of PEG Bandwidth, Uniti Fiber will expand its existing networks in the Quad Cities/Davenport, Iowa, area, as well as Peoria and Rockford, Illinois. The service provider will be extending dark fiber to 80 cell sites.
“Davenport and Rockford are new markets that tie nicely to our Midwest cluster and the Peoria transition allows us to convert the current lit service to a 20-year dark fiber infrastructure transaction,” Gunderman said. “We have also closed a significant lease transaction related to the dark fiber build in Jacksonville and other parts of North Florida for 2-4 strands of dark fiber across the 1,100 mile backbone build.”
CS&L reported that while Leasing and Fiber infrastructure were the star revenue performers with a total of $169.5 and $25.2 million in revenues, Consumer CLEC revenues were $5.5 million, down from the third quarter of 2015.
Uniti Fiber contributed $25.2 million in revenues, up from $13.7 million in the previous quarter. The third quarter results included one month from the Tower Cloud acquisition, while the second quarter included just less than two months from its acquisition of PEG Bandwidth.
Uniti Fiber’s adjusted EBITDA for the quarter was $9.3 million. CS&L has forecast that Uniti Fiber will to bring in $71 million in revenue and $27 million in adjusted EBITDA when the year is complete, suggesting fourth quarter revenues of about $32 million and $12.3 million in adjusted EBITDA.
CS&L also announced today that it is acquiring privately-held Network Management Holdings (NMS) for $65 million. NMS currently owns and operates 359 wireless communications towers in Latin America with an additional 114 build to suit tower sites under development. The NMS portfolio spans three Latin American countries with 313 towers in Mexico, 55 in Nicaragua, and 105 in Colombia.
Under the terms of the purchase agreement, CS&L will acquire the towers under development when construction is completed. The company said it intends to initially fund the transaction through borrowings under its revolving credit facility.
After satisfying customary terms and conditions, CS&L expects to close the acquisition in the first quarter of 2017.
Looking forward, CS&L said it expects full year 2016 net income attributable to common shares to range between 1 to 3 cents per diluted share.
Specifically, CS&L expects Uniti Fiber’s contribution to its 2016 operating results to be about $71 million in revenues and $27 million of adjusted EBITDA.
CS&L reported total third quarter revenues of $200.2 million and a net loss of 3 cents per diluted common share.
About the Author
Sean Buckley is the senior editor of FierceTelecom. He joined the FierceTelecom staff in July 2009 and is responsible for covering news and trends in the wireline section of the telecom industry. Sean works out of his home office in Dracut, MA, and can be reached at firstname.lastname@example.org.