Shentel Expands High-Speed, Reliable Broadband Service in Shenandoah County

Rhea-AI Summary

Shenandoah Telecommunications Company (SHEN) has expanded its high-speed gigabit internet service to approximately 5,000 additional homes in Shenandoah County, with plans to add over 2,000 more by year-end. The $47 million construction project is partially funded through Virginia's Telecommunication Initiative (VATI), alongside Shentel's capital investment and Shenandoah County's contribution.

The expansion focuses on bringing broadband infrastructure to rural areas, including Fort Valley, to enhance education, economic growth, and healthcare opportunities. The project addresses challenges of higher costs in rural areas due to lower population density and extensive distances between homes. Shentel offers fast internet with exceptional reliability, straightforward pricing without long-term contracts, local customer service, and various video and voice service options.

Positive

• Secured partial government funding through VATI grant for rural expansion
• Added 5,000 new homes to service area with 2,000 more planned in 2024
• $47 million infrastructure investment expanding market presence
• Strong local government partnership supporting expansion

Negative

• High construction costs due to rural area challenges
• Lower population density affecting potential revenue per infrastructure investment

Insights

Telecommunications Infrastructure Analyst

The $47 million broadband expansion represents a strategically significant move for Shentel, with several key implications for investors:

The project's funding structure minimizes capital risk through the VATI grant program and county contributions, while securing Shentel's position in historically underserved markets. Rural broadband deployments typically yield higher customer lifetime values due to competition and strong customer retention, despite initial higher deployment costs.

The expansion to 7,000 homes creates a potential annual recurring revenue opportunity of approximately $4.2-5.6 million, assuming industry-standard take rates of 30-40% and average revenue per user (ARPU) of $60-80 monthly. This represents a meaningful revenue growth driver for a company with Shentel's market capitalization.

The absence of long-term contracts in Shentel's offering strategy, combined with local service presence, positions them to capture market share through service quality rather than contractual lock-ins. This approach typically results in lower customer acquisition costs and better retention rates in rural markets.

The infrastructure investment creates substantial barriers to entry, as competing providers would face prohibitive costs to overbuild in these low-density areas. This effectively establishes a natural monopoly in these regions, providing Shentel with sustainable competitive advantages and pricing power.

The partnership with state and local governments through VATI strengthens Shentel's position for future rural broadband initiatives, potentially leading to additional subsidized expansion opportunities. This government relationship advantage is particularly valuable as federal and state broadband funding programs continue to expand.

EDINBURG, Va., Feb. 13, 2025 /PRNewswire/ -- Shenandoah Telecommunications Company ("Shentel") (Nasdaq: SHEN), a leading provider of broadband services, recently extended high-speed, gigabit internet service to approximately 5,000 additional homes in Shenandoah County and plans to add over 2,000 more by the end of the year. This $47 million construction project is partly funded by the Commonwealth of Virginia's nationally recognized Virginia Telecommunication Initiative (VATI). The rest of the funding comes from Shentel's own capital investment and a significant contribution from Shenandoah County.  The goal of the VATI initiative is to create strong, competitive communities by expanding broadband infrastructure into rural areas that lack access to high-speed internet.

"Shenandoah County is thrilled with the progress of its partnership with Shentel and the Virginia Department of Housing and Community Development through the VATI grant," said Doug Culler, Director of Network Services for Shenandoah County. "This partnership has brought high-speed broadband to the most rural parts of the County, including Fort Valley. This crucial upgrade opens doors to greater opportunities in education, economic growth, healthcare, and an improved quality of life for residents. It creates a more connected rural landscape, ensuring that residents have access to essential resources and opportunities."

"Shenandoah County has been fortunate to have such a partner as Shentel to help expand broadband accessibility to the most rural parts of our county. This commitment to Shenandoah County has not wavered since the company was founded in 1902. Their willingness to invest in making certain the majority of the communities in our county are served with modern services will not only have a significant impact on our citizens today, but for generations who will call Shenandoah County home in the future", said Josh Stephens, Chairman of the Shenandoah County Board of Supervisors.

"These rural broadband projects are particularly challenging to build due to the higher costs associated with lower population density and extensive distances between homes. With the help of these grants and excellent leadership from the Virginia Office of Broadband and Shenandoah County, we are making a difference in people's lives," said Chris Kyle, Vice President of Industry Affairs and Regulatory at Shentel.  "We appreciate the support of the Shenandoah County Board of Supervisors in choosing to partner with Shentel on this initiative."

As a leading broadband internet provider serving smaller markets and rural communities, Shentel takes great pride in several key differentiators:

• Fast internet with exceptional reliability
• Easy, straight-forward pricing with no long-term contracts
• Prompt and friendly local customer service
• A full range of video and voice service options

To learn more about Shentel, please visit www.shentel.com for residential service and www.shentelbusiness.com for commercial service.

About Shenandoah Telecommunications
Shenandoah Telecommunications Company (Shentel) provides broadband services through its high-speed, state-of-the-art fiber optic and cable networks to residential and commercial customers in eight contiguous states in the eastern United States. Shentel's services include: broadband internet, video, voice, high-speed Ethernet, dark fiber leasing, and managed network services. The Company owns an extensive regional network with over 16,300 route miles of fiber. For more information, please visit www.shentel.com.

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SOURCE Shenandoah Telecommunications Company

FAQ

How many new homes will Shentel's broadband expansion reach in Shenandoah County?

Shentel's expansion will reach approximately 5,000 additional homes initially, with plans to add over 2,000 more homes by the end of the year.

What is the total investment for SHEN's Shenandoah County broadband expansion project?

The total construction project investment is $47 million, funded through a combination of VATI grants, Shentel's capital investment, and Shenandoah County contributions.

Which areas in Shenandoah County will benefit from Shentel's (SHEN) broadband expansion?

The expansion primarily benefits rural areas of Shenandoah County, including Fort Valley, focusing on previously underserved locations.

What are the key features of Shentel's (SHEN) broadband service offering?

Shentel offers gigabit internet service with exceptional reliability, straightforward pricing without long-term contracts, local customer service, and various video and voice service options.