Hot off its $7.5B Lumen deal, Brightspeed unveiled ambitious FttP plans to reach rural subscribers
The U.S. has a brand new Incumbent Local Exchange Carrier (ILEC). Brightspeed, the nation’s newest and fifth largest ILEC, said this week that it’s officially open for business, more than a year after Lumen Technologies announced the sale to Brightspeed’s parent company Apollo Global Management. Earlier this week, Lumen announced the deal had closed, a few weeks after the U.S. Federal Communications Commission (FCC) gave its approval.
“After more than a year of preparation, we are thrilled to officially begin serving customers as Brightspeed, and to start work to accelerate reliable connectivity for existing and new customers across our footprint,” said Bob Mudge, Brightspeed’s CEO.
Brightspeed acquired CenturyLink assets from Lumen operating in 20 states. Its service territory comprises about 6.5 million locations, predominantly rural and suburban locations throughout the Midwest, Southeast, and parts of Pennsylvania and New Jersey. The assets and operations Brightspeed acquired from Lumen Technologies includes fiber and copper networks. The company provides both voice and data services to residential and small business customers, as well as enterprise services ranging from high-speed connectivity, voice and networking, to managed services.
Brightspeed wants to start laying new fiber lines in earnest now that the Lumen deal is in its rearview mirror. The company has plans to complete more than 1 million new fiber passings across 17 states through the end of next year, and has slated at least $2 billion to build out fiber to more than 3 million more homes and businesses through 2025. Right off the bat, though, Brightspeed said that it’s going to start building out its fiber network in 13 of the states where it operates by the end of the year.
“These locations will be incremental to the 200,000 existing fiber-enabled addresses that Brightspeed assumed upon the close of the transaction,” said the company.
Brightspeed said its new fiber construction emphasis will target locations that have historically been without high-speed access. Brightspeed said that its Fiber-to-the-Premises (FttP) will leverage XGS-PON to deliver up to 10 Gigabit per second (Gbps) symmetrical transfer speeds for its subscribers. Brightspeed said its customer premises equipment (CPE) will use Wi-Fi 6 for optimal wireless connectivity in device-dense homes and office locations.
“We believe internet equals opportunity for households and businesses alike and are committed to making an impact on the rural-urban digital divide.” said Mudge.
Last week, a group of banks led by Bank of America and Barclays shelved plans to sell $3.9 billion of debt from Apollo Global Management to finance the Brightspeed deal. Reuters reported that the banks cancelled the syndication after they failed to generate sufficient investor interest.
“The withdrawal of the announced debt financing package is not expected to impact Brightspeed’s business, employees or customers. Brightspeed expects to commence a debt financing transaction at some point in the future,” said the company in a statement, noting that the Lumen deal was paid for using an equity contribution from Apollo and proceeds from the committed financing announced at the time of the deal.
Aaron Sobel, private equity partner at Apollo, underscored his company’s commitment to Brightspeed in a statement. “We look forward to supporting the business over the long term as it scales its next-generation network.” said Sobel.
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