Initial Charlottesville FTTH share pegged at a realistic 20%

9 February 2017 by Steve Blum
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Ting, a fiber to the home overbuilder, expects its take rate in Charlottesville, Virginia to hit the 20% mark in its first year, and keep growing from there. That’s based on the initial response to its build out, which is very much guided by the level of interest that residents show, according to a Seeking Alpha transcript of Ting’s corporate parent’s latest earnings call (h/t to Sean Buckley at FierceTelecom for the pointer). Tucows CEO Elliot Noss told analysts

It is also worth noting that while we start — started building the network in service and customers in Charlottesville even before we instituted our pre-order system, pre-orders now play a key role in guiding our network expansion there just as we will see in a new town like Holly Springs. Also, pre-order is proving to be about as good as an order with over 90% conversion so far from one to the other…

We expect to see 20% adoption among serviceable addresses in a year and 50% in five years. At these take rates we’ll be paying about $2,500 to $3,000 per customer in CapEx and those customers will be worth about a $1,000 a year in margin.

The 20% figure is a refreshingly realistic assessment of the immediate market potential of an FTTH overbuild in a market where two mainstream telecoms companies – Comcast and CenturyLink – also compete to provide broadband service. It’s in line with the track record of overbuilders in other markets, and particularly with what we know about Google Fiber’s take rates in similarly cherry picked neighborhoods. It’s also an interesting contrast to politically driven projections that aren’t constrained by the legal penalties that await publicly traded companies that pump up false expectations.

On the other hand, 50% is very optimistic, but arguably defensible. As the coverage map above shows, Ting is focusing on areas near the University of Virginia, with higher move in/move out rates , and on newer, affluent residential areas.