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Shenandoah Telecommunications Company Reports Third Quarter 2020 Results

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EDINBURG, Va., Nov. 06, 2020 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN) announced third quarter 2020 financial and operating results.

Third Quarter 2020 Highlights

  • Strong Broadband data net additions of 6,000 with Glo Fiber contributing 1,500

  • Executed Glo Fiber franchise agreements in six new markets in Maryland, Pennsylvania, Virginia and West Virginia

  • Launched fixed wireless broadband service in the counties of Albemarle and Rockingham, Virginia, in October 2020 under the brand name of Beam

  • Acquired CBRS spectrum for $16.1 million

  • As previously announced, T-Mobile exercised its option to purchase our Wireless segment on August 26, 2020

  • The Wireless segment’s financial results will be presented as discontinued operations in the Company’s Consolidated Financial Statements effective with the date of the purchase option

  • As previously announced, our Board of Directors declared a cash dividend of $0.34 per share representing a 17.2% increase over the 2019 dividend.

"Our Broadband business had another quarter of strong operating results with continued demand for our high speed Internet services. We are very excited by the early results of Glo Fiber with a record quarter of net additions and high customer interest following our launch of Beam in October. Based on our track record of success, we plan to accelerate our investments in these new initiatives to increase our Broadband addressable market to over 700,000 homes passed and serve as a catalyst for delivering sustainable long-term growth. Solid operating results along with our strong cash flow generation in 2020, supports returning value to our shareholders with our increased dividend," said President and CEO, Christopher E. French. “With T-Mobile’s exercise of the purchase option of our wireless business, we are focused on the upcoming Wireless appraisal process and the transition to a broadband centric company.”

Shentel's third-quarter earnings conference call will be webcast at 8:30 a.m. ET on Friday, November 6, 2020. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com.

Wireless Update

  • On April 1, 2020, T-Mobile announced the completion of its business combination with Sprint and subsequently delivered to the Company a notice of Network Technology Conversion, Brand Conversion and Combination Conversion (a “Conversion Notice”) pursuant to the terms of the Company’s affiliate agreement with Sprint. On August 26, 2020, T-Mobile exercised its option to purchase all of the assets and operations of our Wireless segment for 90% of the Entire Business Value as defined under our affiliate agreement with Sprint PCS and determined pursuant to the appraisal process set forth therein. As described in more detail in the Company’s 2019 Annual Report on Form 10-K, our Wireless segment has been an affiliate of Sprint since 1999.

  • On August 24, 2020, the Company delivered to T-Mobile a notice of dispute relating to the appraisal framework and other contractual terms related to T-Mobile’s acquisition of our discontinued Wireless operations. On November 3, 2020, the parties aligned in principle to resolve such disputed items including:

    • The valuation date to be utilized by the appraisers will be July 1, 2020.

    • The appraisers will assume the T-Mobile / Sprint merger did not occur, Shentel remains an affiliate of Sprint under the affiliate agreement with continued access to the brands and spectrum and all impacts from the Sprint / T-Mobile integration shall be disregarded.

    • It is currently expected that the appraisers will complete their valuation of Entire Business Value on or about January 20, 2021.

    • The transaction is currently expected to close in the second quarter of 2021, subject to timely completion of the appraisal process and receipt of customary regulatory approvals.

  • The Wireless segment’s financial results will be presented as discontinued operations for all periods presented in the Company’s Consolidated Statements of Comprehensive Income and Cash Flows effective with the date of the purchase option. Prior comparative periods will also be retrospectively recast and presented as discontinued operations. The related assets and liabilities are presented as held for sale in the Company’s Consolidated Balance Sheets.

Consolidated Third Quarter 2020 Results

  • Revenue in the third quarter of 2020 was $55.2 million compared with $51.8 million in the third quarter of 2019, due to the growth of $2.0 million and $1.4 million in the Broadband and Tower segments, respectively.

  • Adjusted OIBDA in the third quarter of 2020 increased $2.5 million to $14.6 million compared with $12.1 million in 2019 due primarily to growth in Towers and a reduction in corporate expenses.

  • Operating income was consistent with third quarter 2019.

  • Earnings from continuing operations per diluted share grew $0.01 to $0.03 and earnings from discontinued operations grew 148.1% to $0.67 per diluted share from the same period a year ago.

Broadband

  • Broadband Data Revenue Generating Units ("RGUs") grew 6,069 to end the third quarter 2020 with 98,764 or 19.8% year over year growth.

  • Incumbent cable broadband added 4,598 Data RGUs in the third quarter 2020 and data penetration grew year over year from 40.0% to 46.2% driven by strong demand for high speed Internet and the enhanced value of our Powerhouse rate card. Churn declined 9 basis points year over year to 1.88% and included approximately 25 basis points of churn related to non-pay subscribers from the second quarter that were affected by Covid-19 for whom we temporarily suspended disconnection. Excluding the suspended non-pay disconnects, churn would have been 1.73%. Broadband average revenue per user (“ARPU”) increased $0.19 to $77.66 in the third quarter 2020 compared to the prior year period driven by subscribers upgrading to rate plans with faster speeds.

  • Glo Fiber added 1,471 Data RGUs in the third quarter 2020 and market penetration grew to 12.5% driven by strong demand for high speed Internet fiber-based services and differentiated local customer service. Broadband churn and ARPU were 0.98% and $80.25, respectively, in the third quarter 2020. Total Glo Fiber passings grew approximately 9,000 sequentially from the second quarter 2020 to 22,347.

  • Broadband revenue in the third quarter of 2020 increased $2.0 million or 4.2% to $50.7 million compared with $48.7 million in the third quarter of 2019, primarily driven by a $3.8 million increase in Cable Residential and SMB revenue partially offset by a $0.9 million decrease in RLEC revenues and $0.5 million decline in Fiber Enterprise and Wholesale revenues. Cable Residential and SMB revenue growth was driven primarily by 19.8% year over year growth in broadband subscribers. Fiber Enterprise and Wholesale revenue decline was due to lower amortized revenue.

  • Broadband operating expenses in the third quarter of 2020 were $41.2 million compared to $37.4 million in the third quarter of 2019. The increase was primarily due to increases in compensation expense of $2.3 million as a result of Glo Fiber and Beam start-up staffing and higher incentive accrual from strong operating results and $1.5 million increase in depreciation and amortization expense due to the expansion of our network.

  • Broadband Adjusted OIBDA in the third quarter of 2020 decreased 1.3% to $19.6 million, compared with $19.9 million for the third quarter of 2019 due primarily to lower amortized Fiber Enterprise and Wholesale revenue from upfront fees and the dilution associated with start-up costs from Glo Fiber and Beam fixed wireless.

  • Broadband Operating income in the third quarter of 2020 was $9.5 million, compared to $11.2 million in the third quarter of 2019.

Tower

  • Total macro towers, small cells and tenants were 222, 8 and 414, respectively, as of September 30, 2020 as compared to 221, zero and 380, respectively, as of September 30, 2019.

  • Tower revenue in the third quarter of 2020 grew 43.3% to $4.5 million, compared with $3.1 million for the third quarter of 2019. This increase was due to a 8.9% increase in tenants and a 37.9% increase in average revenue per tenant driven by amendments to intercompany leases effected in the first quarter of 2020.

  • Tower operating expenses in the third quarter of 2020 was $2.1 million, compared to $1.8 million in the quarter of 2019.

  • Tower Adjusted OIBDA in the third quarter of 2020 grew 42.9% to $2.9 million, compared with $2.0 million for the third quarter of 2019.

  • Tower operating income in the third quarter of 2020 was $2.4 million, compared to $1.3 million for the third quarter of 2019.

Other Information

  • Capital expenditures were $82.7 million for the nine months ended September 30, 2020 compared with $48.8 million in the comparable 2019 period. The $33.9 million increase in capital expenditures was primarily due to higher spending in the Broadband segment driven by our Glo Fiber market expansion.

  • Outstanding debt at September 30, 2020 totaled $696.4 million, net of unamortized loan costs, compared to $720.1 million as of December 31, 2019. As of September 30, 2020, the Company had liquidity of approximately $259.1 million, including $75.0 million of revolving line of credit availability.

Free cash flow, normalized free cash flow and Adjusted OIBDA are non-GAAP financial measures that are not determined in accordance with US generally accepted accounting principles. Reconciliations of these non-GAAP financial measures are provided in this press release after the consolidated financial statements.

Conference Call and Webcast

Teleconference Information:

Date: November 6, 2020
Time: 8:30 A.M. (ET)
Dial in number: 1-888-695-7639

Password: 9885265

Audio webcast: http://investor.shentel.com/

An audio replay of the call will be available approximately two hours after the call is complete, through December 6, 2020 by calling (855) 859-2056.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides a broad range of diversified communications services through its high speed, state-of-the-art wireless, cable, fiber optic and fixed wireless networks to customers in the Mid-Atlantic United States. The Company’s services include: wireless voice and data; broadband internet, video, and digital voice; fiber optic Ethernet, wavelength and leasing; telephone voice and digital subscriber line; and tower colocation leasing. Shentel is the exclusive personal communications service (“PCS”) Affiliate of Sprint in a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, Kentucky, and Ohio. For more information, please visit www.shentel.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of unforeseen factors. A discussion of factors that may cause actual results to differ from management's projections, forecasts, estimates and expectations, is available in the Company’s filings with the SEC. Those factors may include natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, changes in general economic conditions, increases in costs, changes in regulation and other competitive factors.

CONTACTS:
Shenandoah Telecommunications Company
Jim Volk
Senior Vice President - Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com
Or
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203-972-9200
jnesbett@institutionalms.com




SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2020

2019

2020

2019

Service revenue and other

$

55,173

$

51,814

$

162,643

$

153,285

Operating expenses:

Cost of services

22,669

20,947

65,167

62,030

Selling, general and administrative

20,039

19,445

64,227

57,600

Depreciation and amortization

11,995

10,741

36,010

33,807

Total operating expenses

54,703

51,133

165,404

153,437

Operating income (loss)

470

681

(2,761

)

(152

)

Other income:

Other income, net

1,083

994

3,103

3,328

Income before income taxes

1,553

1,675

342

3,176

Income tax expense (benefit)

141

507

(684

)

(108

)

Income from continuing operations

1,412

1,168

1,026

3,284

Income from discontinued operations, net of tax

33,509

13,186

76,422

38,130

Net income

$

34,921

$

14,354

$

77,448

$

41,414

Net income per share, basic and diluted:

Basic - Income from continuing operations

$

0.03

$

0.02

$

0.02

$

0.07

Basic - Income from discontinued operations, net of tax

$

0.67

$

0.27

$

1.53

$

0.76

Basic net income per share

$

0.70

$

0.29

$

1.55

$

0.83

Diluted - Income from continuing operations

$

0.03

$

0.02

$

0.02

$

0.07

Diluted - Income from discontinued operations, net of tax

$

0.67

$

0.27

$

1.53

$

0.76

Diluted net income per share

$

0.70

$

0.29

$

1.55

$

0.83

Weighted average shares outstanding, basic

49,911

49,857

49,889

49,827

Weighted average shares outstanding, diluted

50,105

50,129

50,049

50,110




SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

September 30,
2020

December 31,
2019

Cash and cash equivalents

$

184,050

$

101,651

Other current assets

78,340

85,093

Current assets held for sale

1,148,601

55,109

Total current assets

1,410,991

241,853

Investments

13,034

12,388

Property, plant and equipment, net

413,602

363,087

Intangible assets, net and Goodwill

103,856

88,241

Operating lease right-of-use assets

48,844

42,568

Deferred charges and other assets, net

10,972

9,267

Non-current assets held for sale

1,141,498

Total assets

$

2,001,299

$

1,898,902

Current liabilities held for sale

470,943

$

54,246

Total current liabilities

761,167

$

99,331

Long-term debt, less current maturities

688,464

Non-current liabilities held for sale

379,036

Other liabilities

221,007

205,397

Total shareholders’ equity

548,182

472,428

Total liabilities and shareholders’ equity

$

2,001,299

$

1,898,902




SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Nine Months Ended September 30,

2020

2019

Cash flows from operating activities:

Net income

77,448

41,414

Income from operations of discontinued operations, net of tax

76,422

38,130

Income from continuing operations

1,026

3,284

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

35,522

33,500

Amortization of intangible assets

488

307

Bad debt expense

514

1,215

Stock based compensation expense, net of amount capitalized

5,306

2,769

Deferred income taxes

(279

)

Other adjustments

(349

)

(2,703

)

Changes in assets and liabilities

2,572

(6,889

)

Net cash provided by operating activities – continuing operations

44,800

31,483

Net cash provided by operating activities – discontinued operations

182,499

161,976

Net cash provided by operating activities

227,299

193,459

Cash flows from investing activities:

Capital expenditures

(82,740

)

(48,826

)

Cash disbursed for acquisitions

(10,000

)

Cash disbursed for FCC spectrum licenses

(16,118

)

(16,742

)

Proceeds from sale of assets and other

252

100

Net cash used in investing activities – continuing operations

(98,606

)

(75,468

)

Net cash used in investing activities – discontinued operations

(17,794

)

(58,156

)

Net cash used in investing activities

(116,400

)

(133,624

)

Cash flows from financing activities:

Taxes paid for equity award issuances

(2,182

)

(2,912

)

Other

(727

)

72

Net cash used in financing activities – continuing operations

(2,909

)

(2,840

)

Net cash used in financing activities – discontinued operations

(25,591

)

(44,666

)

Net cash used in financing activities

(28,500

)

(47,506

)

Net increase in cash and cash equivalents

82,399

12,329

Cash and cash equivalents, beginning of period

101,651

85,086

Cash and cash equivalents, end of period

$

184,050

$

97,415


Non-GAAP Financial Measures

Adjusted OIBDA

Adjusted OIBDA represents Operating income from continuing operations before depreciation, amortization of intangible assets, stock-based compensation and certain other items of revenue, expense, gain or loss not reflective of our operating performance, which may or may not be recurring in nature.

Adjusted OIBDA is a non-GAAP financial measure that we use to evaluate our operating performance in comparison to our competitors. Management believes that analysts and investors use Adjusted OIBDA as a supplemental measure of operating performance to facilitate comparisons with other telecommunications companies. This measure isolates and evaluates operating performance by excluding the cost of financing (e.g., interest expense), as well as the non-cash depreciation and amortization of past capital investments, non-cash share-based compensation expense, and certain other items of revenue, expense, gain or loss not reflective of our operating performance, which may or may not be recurring in nature.

Adjusted OIBDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for operating income, net income or any other measure of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

The following tables reconcile Adjusted OIBDA to operating income from continuing operations, which we consider to be the most directly comparable GAAP financial measure:

Three Months Ended September 30, 2020

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

Operating income from continuing operations

$

9,486

$

2,421

$

(11,437

)

$

470

Depreciation

9,939

467

1,422

11,828

Amortization

167

167

OIBDA

19,592

2,888

(10,015

)

12,465

Share-based compensation expense

1,137

1,137

Deal advisory fees

1,032

1,032

Adjusted OIBDA

$

19,592

$

2,888

$

(7,846

)

$

14,634


Three Months Ended September 30, 2019

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

Operating income from continuing operations

$

11,242

$

1,330

$

(11,891

)

$

681

Depreciation

8,472

691

1,433

10,596

Amortization

145

145

OIBDA

19,859

2,021

(10,458

)

11,422

Share-based compensation expense

723

723

Adjusted OIBDA

$

19,859

$

2,021

$

(9,735

)

$

12,145


Nine Months Ended September 30, 2020

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

Operating income from continuing operations

$

29,650

$

6,444

$

(38,855

)

$

(2,761

)

Depreciation

29,960

1,414

4,148

35,522

Amortization

488

488

OIBDA

60,098

7,858

(34,707

)

33,249

Share-based compensation expense

5,306

5,306

Deal advisory fees

3,002

3,002

Adjusted OIBDA

$

60,098

$

7,858

$

(26,399

)

$

41,557


Nine Months Ended September 30, 2019

(in thousands)

Broadband

Tower

Corporate
Eliminations

Consolidated

Operating income from continuing operations

$

33,206

$

3,755

$

(37,113

)

$

(152

)

Depreciation

26,936

2,102

4,462

33,500

Amortization

307

307

OIBDA

60,449

5,857

(32,651

)

33,655

Share-based compensation expense

2,769

2,769

Adjusted OIBDA

$

60,449

$

5,857

$

(29,882

)

$

36,424

Segment Results

Three Months Ended September 30, 2020:

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

External revenue

Cable, residential and SMB (1)

$

37,469

$

$

$

37,469

Fiber, enterprise and wholesale

4,707

4,707

Rural local exchange carrier

4,426

4,426

Installation and other

2,008

2,008

Tower lease

1,864

1,864

Service revenue and other

48,610

1,864

50,474

Revenue for service provided to the discontinued Wireless operations

2,100

2,637

(38

)

4,699

Total revenue

50,710

4,501

(38

)

55,173

Operating expenses

Cost of services

21,326

1,283

60

22,669

Selling, general and administrative

9,792

330

9,917

20,039

Depreciation and amortization

10,106

467

1,422

11,995

Total operating expenses

41,224

2,080

11,399

54,703

Operating income (loss)

$

9,486

$

2,421

$

(11,437

)

$

470

__________________
(1) SMB refers to Small and Medium Businesses.


Three Months Ended September 30, 2019:

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

External revenue

Cable, residential and SMB

$

33,696

$

$

$

33,696

Fiber, enterprise and wholesale

5,163

5,163

Rural local exchange carrier

5,080

5,080

Installation and other

2,073

2,073

Tower lease

1,851

1,851

Service revenue and other

46,012

1,851

47,863

Revenue for service provided to the discontinued Wireless operations

2,669

1,289

(7

)

3,951

Total revenue

48,681

3,140

(7

)

51,814

Operating expenses

Cost of services

20,032

927

(12

)

20,947

Selling, general and administrative

8,790

192

10,463

19,445

Depreciation and amortization

8,617

691

1,433

10,741

Total operating expenses

37,439

1,810

11,884

51,133

Operating income (loss)

$

11,242

$

1,330

$

(11,891

)

$

681

Nine Months Ended September 30, 2020:

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

External revenue

Cable, residential and SMB

$

108,242

$

$

$

108,242

Fiber, enterprise and wholesale

15,858

15,858

Rural local exchange carrier

13,784

13,784

Installation and other

5,928

5,928

Tower lease

5,490

5,490

Service revenue and other

143,812

5,490

149,302

Revenue for service provided to the discontinued Wireless operations

6,818

7,000

(477

)

13,341

Total revenue

150,630

12,490

(477

)

162,643

Operating expenses

Cost of services

61,572

3,537

58

65,167

Selling, general and administrative

28,960

1,095

34,172

64,227

Depreciation and amortization

30,448

1,414

4,148

36,010

Total operating expenses

120,980

6,046

38,378

165,404

Operating income (loss)

$

29,650

$

6,444

$

(38,855

)

$

(2,761

)

Nine Months Ended September 30, 2019:

(in thousands)

Broadband

Tower

Corporate &
Eliminations

Consolidated

External revenue

Cable, residential and SMB

$

99,703

$

$

$

99,703

Fiber, enterprise and wholesale

14,912

14,912

Rural local exchange carrier

15,899

15,899

Installation and other

6,002

6,002

Tower lease

5,365

5,365

Service revenue and other

136,516

5,365

141,881

Revenue for service provided to the discontinued Wireless operations

7,597

3,830

(23

)

11,404

Total revenue

144,113

9,195

(23

)

153,285

Operating expenses

Cost of services

59,348

2,704

(22

)

62,030

Selling, general and administrative

24,316

634

32,650

57,600

Depreciation and amortization

27,243

2,102

4,462

33,807

Total operating expenses

110,907

5,440

37,090

153,437

Operating income (loss)

$

33,206

$

3,755

$

(37,113

)

$

(152

)


Supplemental Information

Broadband Operating Statistics

September 30,
2020

September 30,
2019

Broadband homes passed (1) (2)

230,002

206,262

Incumbent Cable

207,655

206,262

Glo Fiber

22,347

Broadband customer relationships (3)

106,314

94,356

Residential and SMB RGUs:

Broadband

98,764

82,413

Incumbent Cable

95,962

82,413

Glo Fiber

2,802

Video

53,647

55,015

Voice

33,019

30,956

Total Cable and Glo Fiber RGUs

185,430

168,384

Residential and SMB Penetration (4)

Broadband

42.9

%

40.0

%

Incumbent Cable

46.2

%

40.0

%

Glo Fiber penetration

12.5

%

%

Video

23.3

%

26.7

%

Voice

15.5

%

16.3

%

Residential and SMB ARPU (5)

Broadband

$

77.71

$

77.47

Incumbent Cable

$

77.66

$

77.47

Glo Fiber

$

80.03

$

Video

$

93.08

$

89.32

Voice

$

29.61

$

30.68

Fiber route miles

6,705

5,864

Total fiber miles (6)

367,154

311,702

__________________
(1) Homes and businesses are considered passed (“homes passed”) if we can connect them to our distribution system without further extending the transmission lines. Homes passed is an estimate based upon the best available information. Homes passed have access to video, broadband and voice services.
(2) Includes approximately 16,600 RLEC homes passed where we are the dual incumbent telephone and cable provider.
(3) Customer relationships represent the number of billed customers who receive at least one of our services.
(4) Penetration is calculated by dividing the number of users by the number of homes passed or available homes, as appropriate.
(5) Average Revenue Per Customer calculation = (Residential & SMB Revenue * 1,000) / average customer relationships / 3 months
(6) Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.




Broadband - Residential and SMB ARPU

Three Months Ended September 30,

2020

2019

Residential and SMB Revenue:

Broadband

$

22,261

$

18,809

Incumbent Cable

21,770

18,809

Glo Fiber

491

Video

14,823

15,030

Voice

2,894

2,839

Discounts and adjustments

(2,509

)

(2,982

)

Total Revenue

$

37,469

$

33,696

Quarterly Average RGUs:

Broadband

95,485

80,931

Incumbent Cable

93,440

80,931

Glo Fiber

2,045

Video

53,085

56,092

Voice

32,581

30,850

ARPU (Quarter to date):

Broadband

$

77.71

$

77.47

Incumbent Cable

$

77.66

$

77.47

Glo Fiber

$

80.03

$

Video

$

93.08

$

89.32

Voice

$

29.61

$

30.68

Tower Operating Statistics:

September 30,
2020

September 30,
2019

Macro towers owned

222

221

Small cell sites

8.0

Tenants (1)

414

380

Average tenants per tower

1.8

1.7

__________________
(1) Includes 208 and 177 intercompany tenants for our Wireless segment as of September 30, 2020 and 2019, respectively.