When Consolidated Communications changed its name to Fidium several weeks ago, it was a recognition of a range of changes at the company, including the appointment of a new CEO. Telecompetitor spoke recently with Gaurav Juneja, who will replace retiring CEO Bob Udell in January. We discussed the company’s fiber-focused transformation and Juneja’s plans for the company.
“Our biggest challenge is to continue growing at the same rate we have been for the last three years,” said Juneja. “It’s a good problem to have.”
The company, he said, has seen its fiber business grow 35% to 40% each year for the last three years.
“We have to keep growing at the same rate,” Juneja commented. “We have to gain more share.”
Juneja, who has been with Fidium since 2023, is a veteran of several telecom companies, including Metronet, DISH, and Rise Broadband.
Fidium operates in more than 20 states, with a heavy concentration of residential fiber customers in Maine, New Hampshire, and Vermont, as well as California, Illinois, Minnesota, Pennsylvania, and Texas.
Although Consolidated was a publicly held company for many years, it became a private company when it was acquired by Searchlight Capital Partners and British Columbia Investment Management Corporation late last year.
Fiber-focused
Fidium was a brand that Consolidated had used for several years for its fiber-based broadband service. The name change was a recognition that fiber had become the primary technology that the company uses to deliver broadband service.
More than two thirds of the company’s broadband customers are now served via fiber, and the goal is to increase that to at least 80% within a few years.
There are four key elements of Fidium’s fiber growth strategy, Juneja explained: accelerating fiber builds and growth, creating an “exceptional consumer experience” through process improvement, developing a highly engaged employee base, and pursuing operational excellence.
Fiber is a key element of the latter.
“We’re standardizing the network and making sure it’s fiber-centric,” Juneja said. “It’s not just lower maintenance. It also [supports] better customer service.”
The company’s net promoter score is 43 on a scale that ranges from -100 to +100. That’s considerably higher than some companies in the broadband industry.
“Cable is in the five-to-seven range,” Juneja observed.
Customers served over fiber have less than half the churn of customers served over copper, he noted.
Fiber also is key to growing average revenue per user (ARPU).
“We’re growing ARPU three to three-and-a-half percent year over year,” Juneja said. This has resulted from offering higher speeds and from deploying fiber in underserved areas to replace slower service.
Operating margins also are substantially higher on fiber because the technology is more resilient, Juneja said.
Federal funding
Fidium’s fiber deployments could get a boost if the company is approved to receive funding through the Broadband Equity, Access, and Deployment (BEAD) Program for which it received tentative approval in several states.
The states of Maine, New Hampshire, and Vermont recommended the company for a total of about $50 million in BEAD funding, and the National Telecommunications and Information Administration (NTIA) has already approved funding for Maine and New Hampshire. The remaining hurdle in those states is for the National Institute of Standards and Technology (NIST) to approve funding.
“We’re very pleased with the outcome in Maine and New Hampshire, and we’re hoping for the same in Vermont,” Juneja told us.
All BEAD funding would go toward fiber and would be within Fidium’s local service footprint, he said.
Where fiber doesn’t make sense
When asked about areas within Fidium’s local service footprint where the company doesn’t expect to deploy fiber, Juneja noted that the cost to deploy fiber in those areas would be cost-prohibitive — in the range of $10,000 per location.
Because there are few competitors in those markets, the company’s copper-based broadband remains competitive, he said.
What about offering fixed wireless broadband?
The company might consider that, he said. A key concern is carrier of last resort (COLR) obligations that oblige the company to offer voice service. The company is working to see those obligations relaxed.
Moving forward
Moving forward, Juneja anticipates further use of asset-backed securitization (ABS) to raise funding for future deployments.
ABS enables a company to borrow money at more favorable terms by securing it with revenues associated with specific assets. In recent years, several broadband providers — including Fidium — have obtained ABS financing by securing it with revenues from fiber-based assets in key markets.
“The better you perform, the more you can tap into it,” Juneja said. “The biggest advantage of it is that it’s based on fiber growth.”
With few exceptions, private investors — like those who own Fidium — aim to eventually do an initial public offering (IPO) or sell their acquisitions. But Juneja doesn’t expect either of those things to happen any time soon. For now, he said, being privately owned facilitates the current capital structure, which he says is “right for us.”
Updated to state that Fidium operates in 20 states
