Consolidated Communications Holdings, Inc. (Consolidated) provides a wide range of communication solutions to consumer, commercial and carrier channels across a service area in over 20 states.
Consolidated is a broadband and business communications provider offering a wide range of communication solutions to consumer, commercial and carrier customers by leveraging the company's advanced fiber network, which spans approximately 60,000 fiber route miles across many rural areas and metro communiti...
Consolidated Communications Holdings, Inc. (Consolidated) provides a wide range of communication solutions to consumer, commercial and carrier channels across a service area in over 20 states.
Consolidated is a broadband and business communications provider offering a wide range of communication solutions to consumer, commercial and carrier customers by leveraging the company's advanced fiber network, which spans approximately 60,000 fiber route miles across many rural areas and metro communities. The company offers residential high-speed Internet, video, phone and home security services as well as multi-service residential and small business bundles. The company's business product suite includes data and Internet solutions, voice, data center services, security services, managed and IT services, and an expanded suite of cloud services. The company provides wholesale solutions to wireless and wireline carriers and other service providers including data, voice, network connections and custom fiber builds and last mile connections. Consolidated is dedicated to moving people, businesses and communities forward by delivering the most reliable fiber communications solutions.
The company generates the majority of its consolidated operating revenues primarily from monthly subscriptions to the company's broadband, data and transport services (collectively 'broadband services') marketed to residential and business customers. As consumer demands for bandwidth continue to increase, the company's focus is on expanding its fiber broadband services and upgrading data speeds in order to offer a highly competitive fiber product. The company's investment in more competitive broadband speeds is critical to its long-term success. With the initial investment from Searchlight and the concurrent debt refinancing in 2020, the company launched its largest-ever multi-year fiber infrastructure project in 2021 with the goal of upgrading approximately 1.6 million residential and small business premises to fiber-to-the-home/premise ('FTTP') enabling multi-Gig symmetrical speeds. The fiber network investments will be made across eight states, including more than 1 million passings within the company's northern New England service areas. Since 2021, the company has upgraded approximately 960,000 homes and small businesses to FTTP, respectively, and the company launched Fidium Fiber, its new Gigabit fiber internet product to consumers and small business customers.
In 2024, the company plans to upgrade at least 85,000 passings and expand Fidium Fiber further into the company's footprint. By leveraging the company's existing dense core fiber network and an accelerated build plan, the company will be able to significantly increase broadband speeds, expand the company's multi-Gig coverage and strategically extend its network across the company's strong existing commercial and carrier footprint to attract more on-net and near-net opportunities. As the company invest in network upgrades, the company will see stable-to-improved trends in revenue growth and increased broadband penetration. These fiber investments will help the company future-proofs its network and facilitate the continued transformation of Consolidated into a leading super-regional fiber communications service provider.
Searchlight is a strategic partner in the company's execution of this investment and brings a differentiated perspective to the company's broadband-first strategy. They are an experienced broadband and fiber infrastructure investor and they bring significant experience investing in FTTP and broadband expansion. Through the company's partnership with Searchlight, the company has and will continue to pursue targeted investments in the company's business and future growth opportunities as the company transforms the company into a leading broadband and solutions provider and create value for the company's stakeholders, including the company's customers and employees.
Consumer
Broadband Services
Broadband services include revenues from residential customers for subscriptions to the company's data products. The company offers high-speed Internet access at speeds of up to 2 Gbps, depending on the network facilities that are available, the level of service selected and the location. The company's data service plans also include wireless internet access, email and internet security and protection. The company's fiber internet product offers symmetrical speeds from 50 Mbps to 2 Gbps over the latest WiFi 6 technology with no data caps. Customers have the ability to view and manage their WiFi network through the company's Attune WiFi app, which enables customers to create individual profiles, turn on parental controls, manage devices and provide guest access. The company's Voice over Internet Protocol ('VoIP') digital phone service is also available in certain markets as an alternative to the traditional telephone line. The company offers multiple voice service plans with options for unlimited local and long distance calls and customizable calling features and voicemail including voicemail to email options.
Video Services
Depending on geographic market availability, the company's video services range from limited basic service to advanced digital television, which includes several plans, each with hundreds of local, national and music channels including premium and Pay-Per-View channels as well as video on-demand service. Certain customers may also subscribe to the company's advanced video services, which consist of high-definition television, digital video recorders ('DVR') and/or a whole home DVR. The company's Whole Home DVR allows customers the ability to watch recorded shows on any television in the home, record multiple shows simultaneously and utilize an intuitive on-screen guide and user interface. The company's video subscribers can also watch their favorite shows, movies and livestreams on any device. In addition, the company offers several on-demand streaming TV services, which provide endless entertainment options. As the consumer demand for streaming services increases, the company continues to de-emphasize its linear video services and transition customers to streaming TV packages offered through the company's streaming partnerships.
Voice Services
The company offers several different basic local phone service packages and long-distance calling plans, including unlimited flat-rate calling plans. The plans include options for voicemail and other custom calling features such as caller ID, call forwarding and call waiting. The number of local access lines in service directly affects the recurring revenue the company generates from end users and continues to be impacted by the industry-wide decline in access lines. The company expects to continue to experience erosion in voice connections due to competition from alternative technologies, including the company's own competing VoIP product.
Commercial
Data Services
The company provides a variety of business communication solutions to commercial customers of all sizes, including voice and data services over the company's advanced fiber network. The services the company offers include scalable high-speed broadband Internet access, SIP trunking and VoIP phone services, which range from basic service plans to virtual hosted systems. The company's hosted VoIP package utilizes soft switching technology and enables the company's customers to have the flexibility of employing new telephone advances and features without investing in a new telephone system. The package bundles local service, calling features, Internet protocol ('IP') business telephones and unified messaging, which integrates multiple messaging technologies into a single system and allows the customer to receive and listen to voice messages through email.
In addition to Internet and VoIP services, the company offers a variety of commercial data connectivity services in select markets including Ethernet services; private line data services; software defined wide area network ('SD-WAN'), a software-based network technology that provides a simplified management and automation of wide area network connections; and multi-protocol label switching. The company's networking services include point-to-point and multi-point deployments to accommodate the growth patterns of the company's business customers. The company offers a suite of cloud-based services, which includes a hosted unified communications solution that replaces the customer's on-site phone systems and data networks, managed network security services and data protection services. Data center and disaster recovery solutions provide a reliable and local colocation option for commercial customers.
Voice Services
Voice services include basic local phone and long-distance service packages for business customers. The plans include options for voicemail, conference calling, linking multiple office locations and other custom calling features, such as caller ID, call forwarding, speed dialing and call waiting. Services can be charged at a fixed monthly rate or a measured rate or can be bundled with selected services at a discounted rate.
Other
Other services include business equipment sales and related hardware and maintenance support, video services and other miscellaneous revenues, including 911 service revenues. The company is a full service 911 provider and has installed and maintains a turn-key, state of the art statewide next-generation emergency 911 system located in Maine. Next-generation emergency 911 systems are an improvement over traditional 911 and are expected to provide the foundation to handle future communication modes such as texting and video.
Carrier
The company provides high-speed fiber data transmission services to regional and national interexchange and wireless carriers including Ethernet, cellular backhaul, dark fiber and colocation services. The demand for backhaul services continues to grow as wireless carriers are faced with escalating consumer and commercial demands for wireless data. Voice services include basic local phone service packages with customized features for resell by wholesale customers. The plans include options for voicemail, conference calling, linking multiple office locations and other custom calling features.
Subsidies
Subsidies consist of both federal and state funding designed to promote widely available, quality broadband services at affordable prices with higher data speeds in rural areas and for low-income consumers across the country. Some subsidies are funded by end user surcharges to which telecommunications providers, including local, long-distance and wireless carriers, contribute on a monthly basis, while others are components of broader economic stimulus or recovery legislation. Certain subsidies are allocated and distributed to participating carriers monthly based upon their respective costs for providing local service. In other cases, subsidies are awarded to carriers periodically over a predetermined number of years to support their deployment of high-speed broadband infrastructure in underserved or unserved areas. Similar to access charges, subsidies are regulated by the federal and state regulatory commissions.
Network Access Services
Network access services include interstate and intrastate switched access, network special access and end user access. Switched access revenues include access services to other communications carriers to terminate or originate long-distance calls on the company's network. Special access circuits provide dedicated lines and trunks to business customers and interexchange carriers. Certain of the company's network access revenues are based on rates set or approved by the federal and state regulatory commissions or as directed by law that are subject to change at any time.
Other Products and Services
Other products and services include revenues from telephone directory publishing, video advertising, billing and support services and other miscellaneous revenues such as revenue from the company's Public Private Partnership arrangements. The company has entered into numerous Public Private Partnership agreements with several towns in New Hampshire and Vermont to build new FTTP Internet networks. The new town networks provide multi-gigabit broadband speeds to residential and commercial customers. Public Private Partnerships are a key component of Consolidated's commitment to expand rural broadband access.
Network Architecture and Technology
The company has made significant investments in its telecommunications networks and continue to enhance and expand the company's network by deploying technologies to provide additional capacity to the company's customers. As a result, the company is able to deliver high-quality, reliable data, video and voice services in the markets the company serves. The company's wide-ranging network and extensive use of fiber provide an easy reach into existing and new areas. By bringing the fiber network closer to the customer premise, the company can increase its service offerings, quality and bandwidth. The company's existing network enables the company to efficiently respond and adapt to changes in technology and is capable of supporting the rising customer demand for bandwidth in order to support the growing amount of wireless data devices in the company's customers' homes and businesses.
The company's networks are supported by advanced 100% digital switches, with a core fiber network connecting all remote exchanges. The company has deployed fiber-optic cable extensively throughout the company's network, resulting in a 100% fiber backbone network that supports all of the inter-office and host-remote links, as well as the majority of business parks within the company's service areas. In addition, this fiber infrastructure provides the connectivity required to provide broadband and long-distance services to the company's residential and commercial customers. The company's fiber network utilizes FTTP to offer bundled residential and commercial services. In markets where fiber deployment is not yet economically feasible, the company continues to enhance its copper network to increase bandwidth in order to provide additional products and services to the company's marketable homes.
The company operates advanced fiber networks, which the company owns or has entered into long-term leases for fiber network access. At December 31, 2023, the company's fiber-optic network consisted of over 60,000 route-miles, which includes approximately 20,400 miles of FTTP deployments, approximately 22,420 route miles of fiber located in the northern New England area, approximately 3,960 miles of fiber network in Minnesota and surrounding areas, approximately 4,830 miles of fiber network in Texas, including parts of the greater Dallas/Fort Worth market, approximately 1,860 route-miles of fiber-optic facilities in the Pittsburgh metropolitan area, approximately 2,330 miles of fiber network in Illinois and approximately 1,150 route-miles of fiber optic facilities in California that cover large parts of the greater Sacramento metropolitan area. The company's remaining network includes approximately 3,490 route-miles spanning across various states, including portions of Alabama, Colorado, Florida, Georgia, Kansas, Massachusetts, New York, Pennsylvania and Washington.
As of December 31, 2023, the company passed more than 2.6 million homes, of which approximately 47% were at least 1 Gig capable, and had direct fiber connections to 15,105 on-net commercial building locations. The company intends to continue to make strategic enhancements to its network, including improvements in overall network reliability and increases to the company's broadband speeds. The company offers data speeds of up to 2 Gbps in select markets, and up to 100 Mbps in markets where 2 Gbps is not yet available, depending on the geographical region. As part of the company's multi-year fiber build plan, the company plans to extend fiber coverage enabling multi-Gig data speeds to over 70% of the company's passings. The ultimate total passings will be dependent upon, amongst other things, the company's ability to secure Public Private Partnership grant arrangement opportunities. Further network investments will enable the company to continue to meet consumer demand for faster broadband speeds, symmetrical broadband and more bandwidth consumption, as well as more effectively serve the company's commercial customers.
Through the company's extensive fiber network, the company also expects to be able to support the increased demand on wireless carriers for high-capacity transport services, and intend to also leverage the company's investments to grow commercial data services. In all the markets the company serves, the company has launched initiatives to support fiber backhaul services to cell sites. As of December 31, 2023, the company had 3,806 cell sites in service and an additional 166 additional cell sites pending completion.
Sales and Marketing
The company offers its services through customer service call centers, the company's website, commissioned sales representatives and third-party sales agents. The company's customer service call centers and dedicated sales teams serve as the primary sales channels for consumer, commercial and carrier services. The company's sales efforts are supported by digital media, direct mail, bill inserts, radio, television and internet advertising, public relations activities, community events and customer promotions. The company sells its Gigabit consumer fiber broadband service in select markets using the brand known as Fidium Fiber, which launched in November 2021. In February 2023, the company launched Fidium@Work and expanded the company's Fidium Fiber service to small businesses everywhere Fidium internet is available.
In addition to the company's customer service call centers, customers can contact the company through its website, online chat and social media channels. The company's online customer portal enables customers to pay their bills, manage their accounts, order new services and utilize self-service help and support. The company's priority is to continue enhancing its comprehensive customer care system in order to produce a high level of customer satisfaction and loyalty, which is important to the company's ability to reduce churn and generate recurring revenues.
Business Strategies
The company's strategies are to transform the company into a dominant fiber, gigabit broadband provider; grow and invest in commercial and carrier services; and improve the overall customer experience.
Competition
The company competes against Comcast, Charter, AT&T, Mediacom, Armstrong, Optimum, First Light, and NewWave Communications.
Regulatory Environment
At the federal level, the FCC generally exercises jurisdiction over facilities and services of local exchange carriers, such as the company's rural telephone companies, to the extent they are used to provide, originate or terminate interstate or international communications.
The company's incumbent local exchange companies and competitive local exchange companies must comply with the Communications Act, which requires, among other things, that telecommunications carriers offer services at just and reasonable rates and on non-discriminatory terms and conditions.
The company's cable television subsidiaries each require a state or local franchise or other similar authorization in order to provide cable television service to customers. Each of these subsidiaries is subject to regulation under Title VI of the Communications Act.
Under the American Rescue Plan Act of 2021 ('ARPA'), which was signed on March 11, 2021, states have been allocated federal funds to be utilized for capital infrastructure, including broadband deployment, and are in various stages of implementation. The company is working with the states and municipalities in which the company operates, to participate in this broadband grant program.
History
Consolidated Communications Holdings, Inc. was founded in 1894. The company was incorporated under the laws of Delaware in 2002.
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