Shentel makes play for Suffolk

Published 6:09 pm Friday, October 8, 2021

Shentel’s broadband service has been quickly expanding from its western Virginia base and is aggressively making inroads on the Peninsula and in Hampton Roads.

In recent weeks, the Edinburg-based company has announced plans to offer its Glo Fiber broadband in Williamsburg and in Suffolk, and is poised soon to announce another location in the region later this month. Glo Fiber is a 100% fiber network offering high-speed bandwidth, along with symmetrical bandwidth, meaning upload and download speeds would be equal.

Chris Kyle, vice president of industry and regulatory affairs with Shenandoah Cable Television LLC — the more formal name for Shentel — knows the company is coming into a market with a broadband provider already in place. Charter Communications operates under the Spectrum brand in the city.

However, Kyle and Shentel believe it has a superior product that can offer a better customer experience and provide a competitive alternative in an area they feel comfortable in. Kyle said being based in a rural area gives it an understanding of rural communities, and among communities in Hampton Roads, “Suffolk looks and feels an awful lot like home to us, and it’s got some very positive growth demographics.”

Kyle said the company would in the next two years be able to offer fiberoptic service to more than 30,000 homes in the city. “We think we can take a third of this market,” he said.

Those homes will be in multiple areas of the city — the James River through the Harbour View/Bridge Road area in the northern end of the city, down Shoulders Hill Road and Nansemond Parkway near the city line with Chesapeake, as well as the Godwin Boulevard area near Chuckatuck and the Isle of Wight County line and southeast toward downtown.

It is also looking to provide service in the central growth area and then down Holland Road near the industrial development there.

While Shentel had built fiber for clients such as Shenandoah University, it wasn’t until about 2018 when the company decided to put its sizable capital resources into the residential market, first going into Harrisonburg and other western Virginia markets. It recently sold its wireless assets and operations to T-Mobile for $1.94 billion.

In the beginning, it was worried about the risk of competing with larger, more established competitors, but it has settled on a business plan. COVID-19 has only heightened its efforts as more people are working from home, and school divisions have employed virtual learning models to deliver education to children.

Once it gets started, Shentel wants to work with the city to apply for state grant money in the next cycle of funding next year to grow broadband service in the southern end of the city.

Kyle also noted that while their pricing is competitive, it is committed to increasing access and making broadband affordable. Shentel participates in the federal Emergency Broadband Benefit Program (shentel.com/EBB), which allows those who are eligible to receive up to $50 off their bill per month for eligible Internet services.

“This affordability thing’s not going away,” Kyle said. “EBB right now is not a permanent program, but it’s still got plenty of life left in it. They’re going to re-up that, maybe change and tweak it a little bit with the new infrastructure bill.”

Its current pricing is $65 per month for 300 Mbps (megabits per second), $80 per month for 1 Gbps (gigabits per second), and a $250 per month plan for 2 Gbps. It has plans to add video for residents in the future, allowing people to bundle service and get discounts there, but not at first.

City Council last month approved a three-year right-of-way license agreement to allow the company to operate in the city. It was an agreement 10 months in the making. But getting from the agreement to having its broadband service glow, will be a lengthy process.

Kyle said the next year to two years, Shentel will be active in the city getting its service off the ground. It plans to schedule meetings with Dominion Power, and it is finalizing its design. He said people can expect “increasing numbers of people” doing outside engineering and finalizing its diagrams to make sure the company understands and works with stakeholders. He said permitting to get its final design in place will be in the next six to nine months, with construction expected to start by the middle of next year, “if not sooner,” Kyle said.

Though Kyle did not say specifically how much Shentel would invest in its Suffolk service, it will be sizable. At a cost of $1,000 to $1,400 per home passed, according to its investor data, its investment in the city is estimated to be anywhere from $30 million to $42 million.

When construction begins, Shentel contractors will work their way down major roads first to build its backbone before moving into specific neighborhoods, Kyle said, “and light ‘em up as we go, probably 100 homes at a time.”

“We’re not going to get to everybody,” Kyle said. “Some of that will be grant subsidies that we go back and apply for, where they’re unserved, but we’re going to keep growing. … Everybody wants this, but they want it tomorrow. There’s permitting, we’ve got to work with the power companies, all that, but that’s all now getting started. It may be six months to a year before we have our first shovels in the ground. We hope we can go faster.”