2010 Buyers Guide - Broadband Properties

Left to right: Sanford Nowlin, communications specialist; Bryan Geiger, manager, network operations
center; Tom Zanoli, product manager, Internet; Kris Whitman, manager, network engineering.
prospective company [choosing a location],
you are looking for differentiation,
and we felt that a fiber network provided
by one of the best companies in the industry,
GVTC, could provide the impetus
for companies to select Boerne.
After two years, I am proud to say, after
competing against Time Warner, Windstream
and Verizon in one of the most
competitive areas in the country … we
have a 70 percent market share.”
As part of the partnership with the
economic development group, GVTC
provides a large conference room – it can
hold 30 people – next to its own storefront
in Boerne. Says Sorrells: “I was told
that last month the leadership in Boerne
used that conference room an average
of two times a day. So think about this.
They come to a GVTC facility – not just
managers from prospective businesses;
this is the leadership of Boerne – and
they come to our building, our conference
room, branded GVTC, and it has
all the amenities and services including
videoconferencing, provided by GVTC.
We’re helping the leadership of Boerne
to succeed.”
Time Warner Cable is actually the
big competitor in the area, says Mnick.
Verizon is not serving much broadband
there, because it uses old voice lines originally
installed by GTE. Nevertheless,
GVTC’s actions are an example of the
national “Verizon Effect” documented
by researcher Michael Render of RVA.
Some 90 percent of small telco FTTH
deployments are close to the Verizon
footprint or close to other large competitors’
ultra-broadband networks.
FINANCIAL STRENGTH
GVTC’s annual revenue is about $60
million, and the balance sheet showed
close to that much in cash and marketable
securities at the end of 2008. Thus,
it has a strong story to tell when it competes
for business against the likes of
Time Warner Cable (which will have
about $18 billion in debt as it completes
GVTC network operations center.
its split from Time Warner). Sorrells
notes that GVTC does not “have to go
out and attract capital,” and this positions
the company to play long-term.
“We’re really no different from anyone
else,” Sorrells says. “At the end of
the day, we have to make money, and
at the end of the day, we have to meet
an expectation that to some degree was
created under a totally different set of
circumstances. … We used to be a monopolistic
company; if you wanted to do
business with us, you had to do it under
our terms because the [state utilities]
commission set the rates.”
For GVTC, the new fiber-borne business
is critical. Like other telcos, GVTC
continues to see an erosion in access
lines – from about 43,000 at the end of
2007 to about 42,000 by mid-2009. But
all the loss is within its ILEC footprint
(41,500 to 39,500). The CLEC business
is growing, almost doubling in the same
period to more than 2,500 lines.
About half of all access-line customers
take a 1.5 Mbps DSL offering, and
fewer than 1,500 customers were using
dial-up Internet services by mid-year. But
both tiers are quickly losing ground to
GVTC’s higher-speed offerings. Enrollment
in the 5 Mbps tier went from just
over 4,000 premises to nearly 7,000 in
the first six months of 2009; in the same
period, enrollment in the 8 Mbps tier
nearly doubled, reaching about 2,500.
72 | BROADBAND PROPERTIES | www.broadbandproperties.com | November/December 2009