Lumos Networks Announces Plans for Significant Market Expansion of Mid-Atlantic Fiber Footprint In Richmond, Petersburg, Norfolk and Hampton Roads, VA
Lumos Networks Corp. (“Lumos Networks” or the “Company”) (NASDAQ:LMOS) , a leading fiber-based service provider of data, voice and IP-based telecommunication services in the Mid-Atlantic region, announced plans for a significant expansion of its fiber network in the key Virginia markets of Richmond and Norfolk. The Company expects to add approximately 665 total route miles of fiber with planning and construction expected to begin promptly and progressing over a period of approximately 12-18 months.
The total cost for this build is estimated to be approximately $40 million, underpinned by a recently signed carrier contract with a major national carrier for approximately 250 unique Fiber to the Cell (“FTTC”) sites in the region to provide high speed services for the carrier over at least the next 12 years. The expansion will increase Lumos’ total route mileage by nearly 9% but is expected to increase its fiber strand mileage by over 25% due to the significant fiber density planned for this new build. Funding for the build-out cost will be assisted by a new term loan for up to $30 million for which the Company has received commitments from financial institutions, subject to customary closing conditions.
“I am pleased to announce our plans to expand our fiber network in the Richmond metropolitan area while also extending our footprint eastward to the key metropolitan areas in and around Norfolk, Virginia,” said Timothy G. Biltz, CEO and President of Lumos Networks. “Not only will our market expansion in these key edge-out markets materially increase our FTTC sites through recently signed contracts, but it also will increase our addressable market for enterprise data by approximately 60% over our original core markets. Clearly, this is a major step in our transformation of Lumos and exactly the type of organic growth transaction we have been working towards diligently to drive shareholder value.”
Joseph E. McCourt, Chief Revenue Officer for Lumos Networks noted, “Our planned fiber network expansion is going to put our fiber footprint within a short distance of thousands of potentially lucrative on-net locations, including Enterprise buildings, data centers and additional FTTC locations. Further, it will materially increase our Near-Net building list of buildings within one-half mile of our fiber network. Our sales force has already begun pre-selling these areas in earnest.”
Mr. Biltz finished, “Our stated goal has been to expand our dense fiber footprint, supported by long-term data contracts, and we believe that this fiber network expansion is a clear example of executing on our strategy.”
About Lumos Networks
Lumos Networks is a fiber-based provider in the Mid-Atlantic region serving Carrier and Enterprise customers offering end to end connectivity in 23 markets in Virginia, Pennsylvania, West Virginia, Maryland, Ohio and Kentucky. With a fiber network of 7,645 fiber route miles, Lumos Networks connects to 708 Fiber to the Cell sites, 28 total data centers and 1,456 on-net buildings. In 2013, Lumos Networks generated over $104 million in Data Revenue over its fiber network. Detailed information about Lumos Networks is available at www.lumosnetworks.com.
SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this news release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will” and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include, but are not limited to: our ability to close the new $27 million term loan; rapid development and intense competition in the telecommunications and high speed data transport industry; our ability to offset expected revenue declines in legacy voice and access products related to the recent regulatory actions, wireless substitution, technology changes and other factors; our ability to effectively allocate capital and implement our “edge-out” expansion plans in a timely manner; our ability to complete customer installations in a timely manner; adverse economic conditions; operating and financial restrictions imposed by our senior credit facility; our cash and capital requirements; declining prices for our services; our ability to maintain and enhance our network; the potential to experience a high rate of customer turnover; federal and state regulatory fees, requirements and developments; our reliance on certain suppliers and vendors; and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Report for the year ended December 31, 2013. Additionally, goals referred to in this news release are long-term in nature and are subject to various risks and uncertainties. The inclusion of a goal in this release is not a representation by any person that the results will be achieved.
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