Shentel Q4 Results

[Boosted20V]

Shentel released their Q4 earnings and had a solid increase of contract customers. So for all of the hate directed toward the Sprint brand, apparently in areas where the network is strong, consumers respond:

 

The Company announced that net postpaid subscriber additions increased 50.4% to a record 6,054 for the fourth quarter primarily due to an aggressive customer acquisition campaign and reduced churn as a result of the Company's recently completed 4G LTE upgrade. Net postpaid subscriber additions for fiscal year 2013 were 10,829. Shentel's postpaid churn rate in the fourth quarter was 1.69% compared to 1.87% in the same quarter last year. Year-end postpaid customers increased 4.1% to 273,721. The Company's 2013 annual postpaid churn rate was 1.75%.

 

[Boosted20V]

Also:

 

With the completion of its 4G LTE Network and cable upgrades, the Company anticipates that its fiscal year 2014 capital expenditure will total approximately $74 million. Shentel expects that capital expenditure per segment will break down as follows:

2014 Capital Expenditure by Segment Segment Capital
Expenditure Wireless $25.1M Cable $18.9M Wireline $22.5M Other $7.5M Total $74.0M

The $74M will be allocated 24% to maintenance CAPEX, 24% to capacity, 30% to network expansion and 22% will be spent only upon the success of obtaining new revenue generating projects.

[chamb]

Shentel released their Q4 earnings and had a solid increase of contract customers. So for all of the hate directed toward the Sprint brand, apparently in areas where the network is strong, consumers respond:

 

The Company announced that net postpaid subscriber additions increased 50.4% to a record 6,054 for the fourth quarter primarily due to an aggressive customer acquisition campaign and reduced churn as a result of the Company's recently completed 4G LTE upgrade. Net postpaid subscriber additions for fiscal year 2013 were 10,829. Shentel's postpaid churn rate in the fourth quarter was 1.69% compared to 1.87% in the same quarter last year. Year-end postpaid customers increased 4.1% to 273,721. The Company's 2013 annual postpaid churn rate was 1.75%.

When you have good site density and do not go the "skimping" route, you do the upgrades on time and correctly, you do get some good results.  I see quite a few Sprint phones around the Shentel area.  The phones work well. While the 1900 LTE is not totally perfect, it works very well. The 800 CDMA1X works extremely well and they got that working on time too.

When they get the 800 LTE operational, they will have the best network around the area. Actually, they probably already have the best network right now.

Over time, they should be able to continue to increase the postpaid subscribers even more.  Having the best network surely will pay off.  The residents are starting to figure out the quality of the network.  You do not hear the negative comments here in Shentel territory.   I still have a Galaxy S3 and may hold onto it for awhile.  Sure, I would like to use 800 LTE, but my S3 has no problems, I do not have a subsidized upgrade available now and maybe never will.  Why lay out cash for a Tri-Band when the service works very very good with the S-3 and 800 voice/1900 LTE.  Shentel does rock for sure.

[bigsnake49]

Yep, amazing what happens when you don't skip on site density! I keep telling people, if they want to see a PCS network done right, come to Florida and use the Verizon network. 

[irev210]

The big question is - what's going to happen to churn once they seed more Band 26 devices and fully fire up band 26 in shentel service area?

 

I bet we'll see it drop to 1.5%, then trend down to 1.1-1.4% assuming plans remain competitively priced.

[chamb]

The big question is - what's going to happen to churn once they seed more Band 26 devices and fully fire up band 26 in shentel service area?

 

I bet we'll see it drop to 1.5%, then trend down to 1.1-1.4% assuming plans remain competitively priced.

Once they turn up 800 LTE, I doubt that you will EVER lose LTE in Shentel territory anyplace.  Right now, it is very rare to see LTE disappear from your phone.  As for churn, sure you will always have some people churn out.  But they sure will not be churning out because of poor signal quality unless they work or live in a cave.

[grapkoski]

Alas, if Sprint could only get their backhaul providers in check the network as a whole would be performing so much better right now. Luckily for Shentel (and a huge assumption on my part), they are the backhaul in their service area.

Anyways, this is good news and can't wait to see the spicket flowing in other Sprint markets!

[Boosted20V]

Alas, if Sprint could only get their backhaul providers in check the network as a whole would be performing so much better right now. Luckily for Shentel (and a huge assumption on my part), they are the backhaul in their service area.

Anyways, this is good news and can't wait to see the spicket flowing in other Sprint markets!

 

From what I remember in an earnings call they supply ~20% of their own backhaul.

[Fraydog]

Shentel shows it's entirely possible for Sprint to turn around, I hope some of the Ericsson people and top networking execs within Sprint take notes when they look at what is going on with Shentel. 

[S4GRU]

From what I remember in an earnings call they supply ~20% of their own backhaul.

I would have thought it was much higher. I thought I remember them saying once that their own fiber was the largest source of backhaul they have. But relying completely on my memory for something I haven't seen or heard for a long time is rarely a good idea.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

 

 

[S4GRU]

Shentel shows it's entirely possible for Sprint to turn around, I hope some of the Ericsson people and top networking execs within Sprint take notes when they look at what is going on with Shentel.

They just need 98 other Shentels, and they'd be set.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

 

 

[kineticman]

I would have thought it was much higher. I thought I remember them saying once that their own fiber was the largest source of backhaul they have. But relying completely on my memory for something I haven't seen or heard for a long time is rarely a good idea.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

 

Your wall post from Feb 2012 said:

 

"Shentel is upgrading backhaul at every one of their 510 cell sites to microwave or fiber, allowing considerably more backhaul than they need at the moment. This will allow the backhaul to be scalable for future expansion. At some tower sites, where possible, Shentel will even provide their own fiber connection. Estimating possibly as high as 30% of their sites will be connected to their own fiber network. Shentel actually has been slowly upgrading their sites to fiber for the past few years within their past capex schemes.

"

[S4GRU]

Your wall post from Feb 2012 said:

 

"Shentel is upgrading backhaul at every one of their 510 cell sites to microwave or fiber, allowing considerably more backhaul than they need at the moment. This will allow the backhaul to be scalable for future expansion. At some tower sites, where possible, Shentel will even provide their own fiber connection. Estimating possibly as high as 30% of their sites will be connected to their own fiber network. Shentel actually has been slowly upgrading their sites to fiber for the past few years within their past capex schemes.

"

Good work!!!

[chamb]

Good work!!!

Shentel has their own backhaul in some of Virginia where they are headquartered.  They are a local telco and also cable TV provider there.  In Hagerstown, Md, they are very very close to Antietam Cable, a local cable TV Internet provider.  The co-operation there is fantastic for both companies. Antietam/Shentel has access to fiber optics all over the county.  In Pennsylvania, it is more difficult.  I see more microwave there as both Century Link and Verizon are the local telcos and probably more of an issue. I am not really aware of how it works around Martinsburg in WV, but they had Frontier and Comcast cable to deal with there.

So Shentel probably has some easy sites to cover, especially near their home office, but on the other hand, they had some very very difficult sites to cover too.  Some of the area is very rural and the sites are located where broadband never existed before.

 

One thing for sure, Shentel did whatever it took. It did not matter if it was easy or hard, they got it done on time and the whole system works great.  They surely get the award for the best and most trouble free upgrade to Network Vision in the whole country.

We do not need to have a re-vote on the award either.  They win the award no matter how you look at it.

[marioc21]

The earnings call is going on right now. Seems to be about half way through. Nothing interesting so far.



LTE Network details:

47% of data traffic is on LTE

15% of voice traffic is over 800mhz

Successfully installed second LTE carrier on 12 of busiest sites.

Plan to add second carrier to another 12 sites.

Still trying to implement LTE on 800. Still waiting for clearances on spectrum. Seem to be waiting on Sprint.

Approximately 30% of planned CapEx this year is for network expansion mostly to areas adjacent to their cable network. Will include new towers and fiber to towers that don't have it yet. Overall CapEx for coming year will be about 25% below last year's level. 

 

 

Q&A

 

Don't expect too much Spark activity for Shentel until 2015. CEO said they've identified some areas of footprint where 2.5 could be useful, but are taking an observation year to see how it goes for Sprint. CEO was asked how many towers they've identified as possible spark sites and answer was about 100. (20% or so of total towers.)

 

No questions about expanding into nTelos land. Sorry guys.

 

Call over. 

 

[Deval]

 

Successfully installed second LTE carrier on 12 of busiest sites.

 

Plan to add second carrier to another 12 sites.

 

 

I'd love to get some more info on that second carrier. 

[marioc21]

Here's the call transcript.

http://m.seekingalpha.com/article/2058563

Sent from my LG-LS980 using Tapatalk
 

[marioc21]

Okay, so I'm reading over the transcript of the call again to make sure I typed things up right and I caught this passage from the Q&A:

 

CEO: 

We actually did our own optimization, we did not form that out, which is part of the difference there, but our customers are still expressing some displeasure when they travel outside of our footprint as far as their LTE usage.

We are encouraged that Sprint has seen to pick-up momentum as far as completing their 4G build-out. And we’re optimistic that by the end of the year, they will have built out the LTE to the borders and the customer experience will be dramatically improved.

 

So Shentel customers have been complaining about lack of LTE once they hit Sprint's native network. Man, Shentel customers are spoiled. Lol.

[Boosted20V]

Okay, so I'm reading over the transcript of the call again to make sure I typed things up right and I caught this passage from the Q&A:

 

So Shentel customers have been complaining about lack of LTE once they hit Sprint's native network. Man, Shentel customers are spoiled. Lol.

 

It is a stark contrast to go from an area with LTE/800mhz live to slow old 3G. I can see how it affects their sales since many people who live in Shentel areas work in Sprint Corporate markets. This is especially prevalent in the Frederick, MD. area.

[chamb]

It is a stark contrast to go from an area with LTE/800mhz live to slow old 3G. I can see how it affects their sales since many people who live in Shentel areas work in Sprint Corporate markets. This is especially prevalent in the Frederick, MD. area.

Lancaster, Pa is another trouble spot.  Going from Harrisburg or York into Lancaster has been a real wake up experience.

Shentel has had about perfect service in Harrisburg/York for almost a year.  Only recently has progress been made in Lancaster.

It sure did put a foul taste in your mouth as you transferred from Shentel service to Sprint Corporate service there.

 

And before anybody jumps on this --- The foul taste was not Fried Chicken.

[bakedc4]

I hate leaving the Shentel area. Here I can get a usable speed at the edge of 1x800 while in a corporate market I can barely check Facebook with a - 70dbm evdo signal. If both parties are in the Shentel the area while on the phone then it is crystal clear but if one side is in a corporate market then its fuzzy. I thought I blew my speaker the first time I noticed it.

 

Sent from my HTCONE using Tapatalk

 

 

[PythonFanPA]

Lancaster, Pa is another trouble spot.  Going from Harrisburg or York into Lancaster has been a real wake up experience.

Shentel has had about perfect service in Harrisburg/York for almost a year.  Only recently has progress been made in Lancaster.

It sure did put a foul taste in your mouth as you transferred from Shentel service to Sprint Corporate service there.

 

And before anybody jumps on this --- The foul taste was not Fried Chicken.

 

Preaching to the choir here....everytime I head up I'm staying in Elizabethtown, the north side of town is alright thanks to the outskirt Shentel tower off SR 283 (SH00PA000), but anytime you have to tread down towards Kmart/Giant territory you're lucky to get a signal at all sometimes.  The main Etown tower is 3G complete but needs 1x800 badly just for maintaining voice calls in the area.

[Deval]

Lancaster, Pa is another trouble spot.  Going from Harrisburg or York into Lancaster has been a real wake up experience.

Shentel has had about perfect service in Harrisburg/York for almost a year.  Only recently has progress been made in Lancaster.

It sure did put a foul taste in your mouth as you transferred from Shentel service to Sprint Corporate service there.

 

And before anybody jumps on this --- The foul taste was not Fried Chicken.

 

Is that Lancaster as in the Amish country? I usually drive out there every summer for fresh fruit picking. 

[chamb]

Is that Lancaster as in the Amish country? I usually drive out there every summer for fresh fruit picking. 

Yep, the city is somewhat normal, but the country around Lancaster is quite heavily Amish.  Great place to visit.  I live about 90 minutes from there and visit the area often.   It sure is worth it to stay overnight and make it a trip where you see unique things.

So many good restaurants that are Amish in some manner (Many are Buffet style and you will add a few pounds to your gut).  Lots of places to tour.   If you have kids or young adults that like amusement parks, stay another day or two and go to Hershey park.

[Deval]

Yep, the city is somewhat normal, but the country around Lancaster is quite heavily Amish.  Great place to visit.  I live about 90 minutes from there and visit the area often.   It sure is worth it to stay overnight and make it a trip where you see unique things.

So many good restaurants that are Amish in some manner (Many are Buffet style and you will add a few pounds to your gut).  Lots of places to tour.   If you have kids or young adults that like amusement parks, stay another day or two and go to Hershey park.

 

Yep, I've been around the farms there.

 

I actually love how good of a Sprint signal I have there, even on EVDO.