FirstLight Fiber was born out of the combination of three network operators operating in neighboring regions: Tech Valley communications in Upstate New York, SegTel in New Hampshire, and TelJet in Vermont. The company has a unique footprint in a part of the country that really doesn’t get its share of attention when it comes to internet infrastructure. With us today to tell us about FirstLight’s plans for the future is CEO Kurt Van Wagenen, who took over the job in October of 2013.
TR: Tell us a bit about the network assets you operate in Upstate New York and New England. How much of it do you fully own and how much comes from fiber IRUs?
KVW: One of the similarities of these three founder-run companies is that they each really focused on building and owning fiber assets. We have deep fiber counts in all the markets we serve. Each of the companies focused on building out metro fiber in their largely underserved markets. We probably own over 90% of our fiber miles today. We do buy/lease some dark fiber from other providers when it is necessary, but it's a relatively small percentage.
TR: Your network footprint focuses on regions that few national providers invest much in, how does that affect your approach?
KVW: It is historically an underserved market, which has really created the opportunity for FirstLight. Interestingly, but not surprisingly, the customers in these markets have the same demand for high capacity, reliable bandwidth that customers in tier 1 markets have. What we do is to provide an experience in the digital age for customers similar to what you would find in those Tier 1 markets.
One of the ways we differentiate ourselves in the market is with our local presence. As we brought the three companies together, we retained the talented employees in each of the markets they served. That lets us be a high-touch type of company with our customers, and we think that will be a key to our success going forward.
TR: What unique challenges do network operators in the far northeast have to overcome?
KVW: We have to deal with very difficult winters. This past winter was a particularly challenging one in the northeast with respect to snow, ice, storms, and cold weather, which made it very challenging to construct fiber. But nevertheless we've had a very good year in 2013 and on into the start of 2014. In the 9 months I've been here, we've grown the network, added new fiber routes, and consistently added new buildings on a monthly basis. We have a lot of industry veterans who are highly experienced in the markets we serve, so we are used to dealing with the conditions and challenges faced in the northeast.
TR: You just joined the company as CEO 9 months ago. What have you focused your initial attention on?
KVW: I was brought in to bring these companies together and take the company to the next level. My initial focus was on a 100-day plan that focused on getting out there and meeting our stakeholders, customers, employees, and vendors and focused on the foundational items like streamlining the organizational structure, rationalizing the product set, and completing the longhaul and core IP upgrades, as well as working out the basic business practices like the 2014 budget, commission plans, and bonus plans.
With those first 100 days complete, a lot of my attention is now focused on continuing to understand our customers’ needs and make sure we're doing everything we can from a network reach, technology, and capabilities perspective to meet those needs.
TR: How do you plan to grow the business going forward?
KVW: We think about growth in two primary areas. We've had very good organic growth, and we see great opportunities going forward. But we also see opportunities for strategic growth as well where we may be able to add assets that are accretive in our markets.
TR: Where do you expect to expand your network from here?
KVW: At a high level, we're focused on two areas. The first is density: adding new fiber routes, more fiber miles, buildings, data centers, and cell towers. The second is to grow into contiguous markets, expanding further into upstate New York and through more of New England. Our network does extend up into Montreal, and we announced a partnership with Fibrenoire up in Canada where we do see some good opportunities across the border.
TR: How do you balance the wholesale and enterprise opportunities?
KVW: Historically, while the three companies that were brought together to form FirstLight Fiber had a very similar approach to building out fiber, there were some differences in terms of customer bases. Tech Valley was very successful in targeting the enterprise market, while SegTel had a more wholesale/carrier focus, and TelJet did both but also data center connectivity and services. So we've been leveraging the best practices of all three companies to expand both our wholesale and enterprise businesses across the whole geography. That's enabled good growth for us.
TR: Which products have you been seeing the most demand for?
KVW: We've been seeing good opportunities in cell tower backhaul services across our footprint, as the major wireless carriers upgrade to LTE and look to scale their networks with fiber. In the enterprise market we're seeing requests for our point-point Ethernet, virtual PBX, and data center services as enterprises are increasingly looking to outsource their IT. We're also seeing strong demand for our wavelength and internet access services.
TR: For wireless backhaul, is it dark fiber or lit services that you find carriers are looking for today?
KVW: We find that it's very dependent on the specific wireless carrier. Some have been more focused on fully managed lit services, but we have other carriers that are looking for dark fiber and to manage their network themselves. I'd say we've been having more conversations around dark fiber offerings with certain carriers. I think it's more a function of what they see as their bandwidth demand, their need for predictability around costs going forward, and their design plans for aggregation and potentially small cell deployments. It's specific to the customer and the evolution plans they have for our region.
TR: You mentioned small cells, have carriers started deploying this technology in earnest yet? What stage is it at?
KVW: I think it's still evolving. There's still a lot of thinking going on in with the carriers and in the industry in general regarding how we can best meet bandwidth demand. Small cells will be an important part of that going forward. We do already have a few small cell orders and are seeing some traction. We see increasing demand going forward as the carriers decide how they want to deploy small cells.
TR: Thank you for talking with Telecom Ramblings!