Shentel expands fixed wireless service for rural communities

Shentel had nearly 500 Beam fixed wireless subscribers at the end of March, with broadband data APRU of $73.14. (Getty Images)

Shenandoah Telecommunications Company (Shentel) expanded fixed wireless access (FWA) service using 2.5 GHz and 3.5 GHz spectrum to three new towns in northwestern Virginia.

Shentel, a former Sprint affiliate, is targeting 2,700 additional homes with its new LTE-based FWA service, called Beam Internet that launched last year. Locations include New Canton, Mount Jackson and Dillwyn. Expansion of the service has already made it available to 15,000 households in 2021.

Shentel is in the process of selling its wireless assets to T-Mobile, with the transaction expected to close in the third quarter. But the $1.95 billion deal doesn’t include the Citizen Broadband Radio Service (CBRS) licenses won at auction last year or its 2.5 GHz holdings.

Beam Internet is targeted at low-density rural areas within Shentel’s footprint and is part of an edge out network expansion strategy, with a Glo Fiber-branded fiber-to-the-home broadband service focused on more densely populated locations. Shentel also offers wireline cable and phone services.

On the company’s first quarter earnings call at the end of April Shentel CEO Christopher French said Glo Fiber and Beam now account for more than 40% of broadband data net additions.

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The LTE-based fixed wireless service has three speed tiers of 25 Mbps, 50 Mbps and 100 Mbps, starting at a cost of $65 per month. French said almost two-thirds of customers had adopted the $80 per month 50 Mbps speed tier, exceeding the company’s expectations and providing “a strong validation of our rural broadband investment thesis.”

In the first quarter market penetration reached 3.1% and churn was just under 1%, which he said was “very encouraging to see. “

Shentel had nearly 500 Beam subscribers at the end of March, with broadband data APRU of $73.14.

“We believe that folks would pay a premium for quality, reliable, unlimited high-speed Internet connection in areas where cable and fiber have not and likely will not be constructed, given the low density nature of these areas in our footprint,” French said, according to a transcript.

Plans call for 70 new Beam fixed wireless sites this year, which will increase households passed to about 45,000 by the end of 2021. Shentel expects capital spending between $100 million and $105 million related to the fiber and fixed wireless expansion efforts – with design and construction accounting for $74 million and connecting subscribers the remaining $13 million. The company didn’t break out the Beam-specific spending.

As a Sprint affiliate for more than 25 years, Shentel is using its experience in wireless network design, construction and operation to deploy FWA.

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AT&T, T-Mobile and Verizon are all getting in on the fixed wireless game, with 4G LTE and 5G fixed wireless either available or on deck. But French suggested Beam Internet is different.

“Unlike fixed wireless offerings you may read or hear about from the big three mobile operators, Beam Internet leverages professionally installed high-gain outdoor mounted equipment on the customers home, which ensures optimal network performance and capacity,” he noted.

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For the outdoor CPE, Shentel is using Nokia and Intech, while Eero supplies Wi-Fi routers for the indoor CPE. 

A 5G-ready LTE based core is the foundation of the Beam network, French said. Nokia is also a 4G LTE core vendor for Shentel, as is NetNumber.

French noted the company purchased licensed 2.5 GHz and 3.5 GHz spectrum “expressly for this purpose” to deliver fixed wireless.

The operator spent around $16 million to acquire mid-band 3.5 GHz priority access licenses (PALs) in 74 counties across Virginia, West Virginia, Maryland and Pennsylvania. In total, the spectrum holdings covering 5 million PoPs, with an average depth of 39 MHz.

Beam Internet sends signals from commercial grade towers or small cells that are largely fiber-fed, adding reliability and low-latency, according to French.

Not concerned with LEO satellite broadband

As Shentel is targeting low-density location with fixed wireless, analysts on the earnings call questioned whether low earth obit satellites (LEOs) focused on broadband in underserved areas, such as SpaceX’s Starlink, could disrupt rural markets that the company operates in.

“In terms of the things that keep us awake at night here, I don’t think LEOs is one of them,” said Shentel EVP and Chief Operating Officer Dave Heimbach last month.  

While both Beam and satellite broadband efforts are targeting similar densities, Shentel expects the fixed wireless service to be a superior product.

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Heimbach noted that the LTE-standards based network is capable of 100 Mbps today but will likely increase to 300 Mbps “in the not too distant future.”

He also indicated doubts about the economic model for LEO broadband and cost of customer equipment.

“I think we both know that there is a lot of maturing that needs to take place for that business to achieve any kind of scale where it has anything close to subscriber level economics like we see,” Heimbach added.

That said, just last week Starlink reported more than half a million people have already registered to get service, and Elon Musk indicated there would be no issue with meeting demand.