ROSEVILLE, Calif., June 1, 2011 /PRNewswire via COMTEX/ — Following the excitement that has been created with its recent launch of fiber homes in Olathe, KS, SureWest Communications (Nasdaq: SURW) today announced that its Board of Directors has approved adding 5,000 new homes to its 2011 capital plan, resulting in a total of 15,500 fiber home additions scheduled this year in Olathe.
Steve Oldham, SureWest’s president and chief executive officer, said, “This acceleration of homes is a direct result of the high customer demand for SureWest’s fiber service and the excellent work of our employees, who have been delivering homes efficiently and ahead of schedule. We have created a buzz in the marketplace with this new service offering and are successfully selling at rates exceeding our expectations.
“Our goal is to reach 35-40% in total penetration on the new fiber homes, and in just a month we have already achieved 18% sales penetration on the first 2,000. In some areas, we are as high as 33%. The acceleration of homes speaks to the confidence we have in our plan and in our employees to continue delivering a strong return on our investments. These types of growth opportunities are expected to generate long-term sustainable free cash flow and additional value for our shareholders.”
The additional homes enable SureWest to further take advantage of Federal tax incentives on new investments made in 2011. It increases SureWest’s projected 2011 capital expenditures range from $60-70 million to $65-74 million. Projected capital expenditures for 2012 remain in the $60-70 million range and in the $55-65 million range for 2013.
SureWest expects to continue investing in high-margin growth opportunities and is prioritizing spending where it has experienced the greatest returns. The company has achieved high penetration levels in the Kansas City market since it began passing fiber homes in 2009. The existing Kansas City hybrid fiber coaxial network has 40% penetration levels and the 11,600 new fiber homes passed in 2009 have already reached 34% penetration.