Astound Broadband has just acquired assets in three new markets in a $ 661 million deal with WideOpenWest (WOW!), But CEO Jim Holanda told Fierce the company still has its eyes on additional opportunities to expand its presence in new and adjacent markets.
The company, which offers services under the RCN, Grande Communications and Wave Broadband brands, is the sixth-largest cable operator in the United States. In November 2020, it was sold by TPG Capital to private equity firm Stonepeak Infrastructure Partners for $ 8.1 billion. Holanda said the deal would likely close within the next four to six weeks.
The CEO said Astound used to pursue accretive acquisitions, with backing from TPG. He added that Stonepeak is also supportive and that the company will continue to assess strategic measures to strengthen its holdings.
Some of Astound’s recent deals include the acquisition of Texas-based EnTouch Systems in September 2019 and the purchase of central California fiber optic provider Digital West in January 2020. At the end of last month, it notably recovered assets from WOW! in Chicago, Illinois; Evansville, Indiana; and Anne Arundel, Maryland.
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Holanda referred to this latest deal as a perfect match, noting both WOW! and Astound’s networks are fully DOCSIS 3.1 equipped, and the Premier’s network in Chicago complements rather than overlaps its own. He added that Astound has an eye on the assets of WOW! in Chicago for the past seven or eight years, with agreement discussions taking place from time to time during that time.
“The fact that they sort of packed the Chicago market with Anne Arundel County in Maryland, which is just outside of our DC footprint, and then owned by Evansville, Indiana. , which is kind of a strong tier 2 market, that really made a lot of sense to us, “he said.” Clearly to us it seemed like they had built this cluster for our sake, knowing that we had had conversations over the years in the past. ”
In all three markets, the WOW! the deal has brought Astound more than 700,000 homes, 5,700,000 factories and 128,000 residential and commercial customers. Holanda said Chicago accounted for 480,000 of those crossings, adding that the deal would essentially double its footprint in the city and expand its footprint in the DC area by a third. Once integration efforts are completed, he said he will focus on increasing penetration in newly acquired markets.
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The CEO said that the competitors of WOW! markets are the same as in its other areas of service: Comcast and AT&T in Chicago and Verizon and Comcast in DC do this “despite AT&T and Verizon’s fiber expansion efforts. He noted that it already delivers a gigabit level of speed across its entire footprint and that “DOCSIS 4.0 is on our radar screen.”
Holanda argued that Astound also has a stronger underlying HFC network than some competitors. He explained that when it was built in the 1990s, each node was powered by 12 fibers and served 120 to 150 homes at a time when the standard was to run four to six fibers per node and go up to 500 homes. . This made the network more resilient and allowed Astound to deliver higher speeds to more customers without network degradation, he said.
While Astound is “hyper focused on wireline,” Holanda revealed that he has had “MVNO conversations” with all of the major US wireless carriers over the past few years. He added “it continues and we continue to monitor what our competitors are doing.”
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Comcast, Charter Communications, and Altice USA have all launched wireless MVNO efforts in recent years, with Comcast recently realizing its first quarterly profit from the business. Holanda said Astound does not currently believe that its customers will lose due to the lack of a wireless offering, but “we will keep this option open if customers want that from us at some point in the future.”