Shentel is planning to sell its 2.5 GHz spectrum licenses that it's using for its Beam Internet fixed wireless access (FWA) service. Jim Volk, SVP and CFO of Shentel told investors on the company’s 2Q 2022 earnings call last week that Shentel will continue to operate its Beam FWA service and support existing customers but the company has decided “to explore options for selling the spectrum holdings.”
Volk said that the original cost of the company’s 2.5 GHz spectrum was about $15 million and Shentel believes that the spectrum has more than held its value.
Shentel launched Beam Internet in 2020 and used its 2.5 GHz spectrum to deploy FWA service in portions of Virginia, West Virginia and Ohio. The company targeted underserved residences with its service and delivered three speed tiers with monthly prices started at $60/mo.
However, late last year Shentel announced it no longer planned to expand Beam. The company said that the influx of government broadband grants for unserved areas made the Beam business model no longer profitable. Instead, Shentel decided to pivot to fiber and expand its Glo-branded fiber network.
Volk also said that Shentel decommissioned 20 unprofitable Beam cell sites in 2Q and it now expects Beam to be EBITDA breakeven in the second half of the year.
Shentel ended the quarter with 1,753 Beam Internet subscribers, up from 841 in the same quarter in 2021. The company said it has about a 9.7% penetration rate with its Beam service. Average revenue per user in 2Q was $73.68 per month, a slight increase from $72.38 in 2Q 2021.
Funding fiber with wireless assets
Shentel isn’t the only regional telco that wants to use its wireless assets to fund its fiber expansion. Last week Consolidated Communications announced it was divesting its limited partnership interests in five wireless businesses managed by Cellco Partnership, which is a wholly owned subsidiary of Verizon.Cellco will purchase Consolidated Communications’ interests for $490 million. Consolidated plans to use the cash to help pay for its fiber deployments.