Now shed of wireless assets, Shentel embraces broadband
Shenandoah Telecommunications Co., or Shentel, sold its wireless assets in July to T-Mobile USA Inc. for $1.94 billion, leaving the Edinburg-based company with approximately $1.25 billion in proceeds after paying off outstanding loans and ending contracts.
The sale is an outgrowth of Shentel’s former wireless affiliate contract with T-Mobile (and earlier with Sprint Corp., which was purchased by T-Mobile in April 2020).
After Shentel pays a special dividend of $18.75 per share to its shareholders (totaling $936.6 million) in August, the company plans to invest the rest of the money in broadband expansion.
The company, which serves customers in western Virginia, West Virginia, Maryland and Kentucky, has focused on growing its Glo Fiber and Beam broadband services.
Since 2020, Shentel has laid down Glo Fiber residential fiber optic lines in Harrisonburg, Staunton, Winchester, Lynchburg and Roanoke, with Blacksburg on the way. And during the pandemic, the company’s Beam line, which provides 5G service via fixed wireless broadband to rural areas, saw a major increase in customers who suddenly needed robust internet while working from home.
“We’ve got a lot in the pipeline,” says Ed McKay, the newly appointed executive vice president and chief operating officer who assisted with Shentel’s transition out of the wireless business. For starters, he says, Beam is moving into Albemarle and Rockingham counties soon. “The key, in our perspective, is to go for areas that truly are underserved.”
As of July, the company employs 886 people, down from about 1,000 before its wireless assets were sold, says Shentel President and CEO Christopher French. Some former wireless employees have moved to T-Mobile, and others moved to different positions within Shentel, he adds.
Shentel’s expansion of broadband along Virginia’s western edge aligns with the goals of state and federal officials. Gov. Ralph Northam is aiming for full statewide broadband coverage by 2024, while President Joe Biden has also placed a high priority on internet access in his infrastructure plan, allocating $65 billion
to boost broadband infrastructure.
French notes that the company plans to seek partnerships with local governments to expand broadband access, but the company still faces large challenges in bringing reliable internet to more remote areas.
“You can’t legislate away the distance and the cost to connect those locations,” he says. “A lot of these [government] initiatives are helpful, but they can be most impactful if they’re targeted toward underserved areas.”