CBB
#Hi, <UNK>.
It's <UNK>.
On the ARPU question around voice, I think what you're seeing is kind of the gradual waiting shift of sales as legacy voice declines and sales of Fioptics pick-up, obviously, we're more competitive with the voice-attached rates with Fioptics and as revenues are assigned within a bundle it is a more competitive price and has been for a while, so there haven't been any short-term changes in that.
I think that what you're seeing is effectively the waiting shift as we ---+ as that they shift with that, I can answer the housing market is strong.
Yes.
It's strong and it continues to grow.
It's more growth in the north of the city.
That's where it's headed and we have the product to support that growth.
The churn elevation, every time at this year, July, in June, June-July is really the moving season.
And so, we have every ---+ it is cyclical and seasonal based on that.
The percentage of our base ---+ around 30% of our base is in the MDU market, now obviously that's shrinking, we're selling ---+ the majority of our sales today incrementally are to SFUs, but if you remember, we started the Fioptics strategy in the MDU space, as a test to see that we could actually be successful in this business.
So we do have a higher percentage in the MDU space, but that is lowering overtime.
Well, there's actually two things, one is the backhaul and that's about $4 million.
Then we also handsets sales of ---+ Verizon handset sales and that was about $2 million.
Yes, it should.
Third quarter, we expect to be fairly level.
Yes.
But <UNK>, we're seeing the same pressure on our carrier side as most of the other carriers are seeing, the big carriers are doing network roaming, there's price competition, that does not change, that's been pretty consistent for the last year or so.
We see the same things they're, but the big jump that you see the $4 million was a tier jump specific to us getting fully into discontinued operations from running the wireless business.
So as GAAP ---+ the way GAAP worked it because we were still operating technically in our wireless business in Q1, we had to recognize that backhaul revenue and as soon as we got out that went away.
Well ---+ first of all, we're very bullish on that segment.
It is the segment that we've taken out of territory, we now have a presence in Columbus, Louisville, in Indianapolis.
We have been extremely successful in winning business even though we don't have an on-network offering there.
We have just recently won three big VoIP deals at our territory, we won the state of Indiana, state of Kentucky.
In a large enterprise deal.
Yes.
And so all three of those were in the process of finalizing the documents and will win that.
So yes, we expect continued growth.
It is a big area of focus for us and we're excited about the performance we've generated.
Yes.
Hi, <UNK>.
This is <UNK>.
Yes, it's going very well in territory.
We only see one of the major carriers extremely active from a build standpoint.
And we just ---+ <UNK> and I had just paid a visit to that carrier recently and I think they're overjoyed with the performance at Cincinnati Bell has given them in that space, I think we mentioned in the past our ability to combine our networking experience and our wireless experience.
I think is a clear differentiator.
I think our problem is, we're only in the market and the thing that we hear from especially that carriers, we wish you were in other markets.
But as the market grows, and other carriers get a little more aggressive, I think we have a clear right to win in the area and we'll go as aggressively as we need to go in that space.
It is slow going though as you've probably seen across the nation, I think, most of the carriers are still figuring this out and it's ---+ I think they probably feel it's going pretty aggressively, because it is, but it's going to be a slow rollout from the standpoint of actually kind of delivering numbers to folks like us.
It will mean, eventually it will mean accelerate CapEx, but the returns are nice and we feel like it's definitely an area we can grow in the future.
No.
We haven't.
No.
We don't know.
Thanks, <UNK>.
In the managed services business, popular products are really managed voice, so as Company's state agencies move to a future voice strategy, a lot of them don't look at voice as being core, so they want providers like Cincinnati Bell to provide that as a utility.
So we see that as one of the more popular areas.
Also managed infrastructure, server and storage infrastructure and the management monitoring around that and the outsourcing around that environment is another big one.
With certain customers, we see, if you kind of tick down from those two, we see VDC, virtual data center in certain customers, we've a very, I think well-developed virtual data center product, but that's really ---+ we're seeing success in more mature enterprise companies in that area.
With respect to margins, these are fairly capital intensive upfront endeavors.
So what you see is, you see a capital investment upfront and then you see as you implement and you start to especially like in the VoIP services, as you see implementation and handsets being taken down by the businesses you see increased margins overtime and margins are actually pretty attractive given the capital investment upfront and the fact that we can manage most of it from a semi-centralized operating platform.
Does that make sense.
And the capital spend is, it's success base.
You're not spending the money until you have the deal.
Yes.
And the other thing to highlight, the difference between the businesses, beyond that business ---+ in the managed services business that the capital is a lot less than what you're used to hearing about with respect to like entertainment and communication.
So it is capital intensive, but from a comparative standpoint, the intensity is a lot lower.
Yes.
It's a lot quicker.
No.
Not.
Not that quick.
But it's a good return.
It's within contract terms.
Well, I think some of things that we'll see is, Charter offers a very simple product offering.
Right now, it's like 60 meg for 39.99 in other areas.
They're going to have some work to do when they get here to upgrade the network.
But, we expect to have very competitive offers and they're going to tied in the speed.
So, but I think we're very well positioned to compete with our fiber product and so, that's what we expect.
We expect simpler offerings and they're going to focus on speed.
Yes, <UNK>.
We're still very focused in the short-term on paying down debt as a part of capital structure, but as mentioned in the past, we are starting to change and shift focus to the equity and looking at strategies on how to boost equity as a form of currency and I think you'll see things in the kind of the mid-term from us.
And I think we've said in the past that we're more inclined around buybacks than we are a dividend.
So as we inch closer, we look forward to the opportunity to execute on some of those strategies.
First of all the ---+ your first question, yes, we're ---+ we have a big focus on that and we're seeing great growth on dark fiber.
Dark fiber, I think <UNK> alluded to, in our city we're seeing primarily one carrier that's coming out with contracts, but we are starting to see interest from other carriers and he alluded to that ---+ we met with a large carrier last week, it was very bullish on our performance.
They were very aggressive and trying to get us to travel outside of our Cincinnati area to help them and we'll look at those opportunities.
Yeah, <UNK> we're seeing ---+ we're not only seeing dark fiber opportunities in that area, but we're also seeing opportunities to expand outside of the region with dark fiber, so there are opportunities for us (inaudible) today that would expand our footprint through an IRU structure.
And with respect to M&A, we've always been curious, I think if you look at the two assets that we have on-net and then IT solutions the off-net, as mentioned, we're seeing great success in IT solutions and on the network, on the network side, I think we have to focus on finishing the build.
On the IT solutions side, I think there's opportunities that we could look at over the next several months and expand our footprint, our presence there and I think it's an underserved area.
We're a huge fan of that segment, and I think we need to boost that in the attention of that segment more in the future.
If you look at competitors out in the market, I think we do a fairly good job on higher end of those services and yet it still trades at CBBs multiple, right.
So where it's competitors and recent transactions traded (inaudible).
So we think there's an opportunity there, but we're obviously cautious given everything going on.
And <UNK>, we have a lot of work to do to execute on what we're doing now, but we're always open to look at M&A and as <UNK> alluded too there is opportunities.
Well, we're not going to get into what we have now, but we are looking at a new vendor and we're very excited about the potential, we're in the process, I think we've got about 350 customers on the product right now and we're seeing a lot of positive response.
So, we're very bullish on what we're trying to accomplish there.
Yes.
<UNK>, the guide piece that we're working on, one, the improvements as we look at certain customer surveys, the surveys are coming out to being very comparable or slightly better than even someone like DirecTV.
The improvements also allow us to integrate with other vendors also and you heard us mention DVR, enhanced DVR solutions, over-the-top solutions, so that is the direction, we understand that, that's the direction the industry is going and so, the improvements that you'll see allow us to integrate the platform across the board.
And also just on a personal note, the channel speeds are unlike anything you've seen.
The channel guide speed is unlike anything you've ever seen, so like zero to no delay and channel guide switching, so it's just little things like that, that we focus on making improvements around.
Cost to install has stayed pretty consistent in the [750 to 850] range depending per install.
From a wireless standpoint, we do use it, but we don't use it across the board.
It's something that we are developing, our technical ---+ the technical side of the Company does have a focus on improving the installation from a cost basis standpoint and wireless would be a big part of that.
We're seeing some of the same things and it's over-the-top, we hope to have that offering out early next year and we see that we'll be able to offer a product that will be good, better and best and we'll be able to customize it to whatever the consumer would want.
And that's kind of how we're adjusting our marketing around that piece.
The good part of it is we have a pipe, today that we can get a gig service to a consumer so the build out and the continued ---+ we're about 47% of the city cover.
We'll have by the end of the year, hopefully close to 55% and on our way to 70% to 80%.
So we're going to have the pipe that can handle it.
We're going to have a product offering that we can customize based on what the consumer wants.
Yes.
And on the impact of broadband, we've seen just in the past year in peak hours, I believe, hold me to it, but I believe it's like a 20% increase in broadband usage during peak hours.
So it's definitely having an impact on broadband use.
Well their penetration today is about 25%.
We're actually a seller of DirecTV in our market and obviously with our product in Fioptics we do compete in some areas and our focus clearly is on Fioptics, but again, we're prepared based on the product that we have, we're focused on continuing to improve it and offering solutions to customers and consumers that meets our demand.
