JAB Broadband Expands Rural Fixed Wireless Footprint

This article originally appeared in the Dec. 2012 issue of Next Gen Mobility Magazine.

In years past, a cornucopia of small cable TV operators dotted the landscape across the United States. Then, in the mid-1990s, a select group of cablecos latched on to the concept of clustering, which had them buy up fellow properties in their regions. That resulted in a much smaller and stronger collection of what is now known in cableco parlance as multiple system operators, or MSOs.

JAB Broadband has a similar strategy today, but this one is happening on the fixed wireless service provider front.

In fact, the JAB Broadband team has a background in cable, says Jack Koo, CFO and COO. In the 1990s, he says, the group did a roll up of cable systems, completing 40 acquisitions. That enabled Frontier Vision Partners, of which Koo was co-founder, to become the tenth large cable MSO. That business was sold to Adelphia in 1999 for $2.1 billion.

Now, Koo says, JAB Broadband is working to consolidate another industry that’s still in its infancy – the fixed wireless service provider space. Colorado-based JAB Broadband, which got its start in May 2006, has acquired 80 companies over the last six years.

JAB Broadband worked with Hercules Technology Growth Capital, which provided the company with $15 million early on to help the company grow from 26,500 to 46,200 subscribers in just nine months. That enabled JAB Broadband to attract the interest of Avry Partners, which made an investment in October 2008. In light of the state of the general economy at that time, Avry’s investment in JAB was “especially amazing,” notes Koo. GE Capital is also a JAB investor.

Today, JAB Broadband has approximately 150,000 subscribers and revenue approaching $100 million.

The Wireless ISP Association reports there are something like 2,500 fixed wireless businesses in the U.S. serving between 2 and 2.5 million customers, Koo notes, yet this is an industry that’s not very widely known. Fixed wireless is great because it helps address the digital divide and can be used to reach areas that are otherwise unreachable or untenable prospects for wireline solutions, Koo says; however, fixed wireless has a checkered past, primarily because there have been several commercial players over the years that tried and failed to build businesses involving the creation of national or superregional networks. The problem, according to Koo, was that in most cases those players had wide targets yet never got adequate scale to be profitable.

While JAB Broadband is similar to those companies in that it is moving to scale to gain financial, network and operating efficiencies, the company is unique in that it focuses on customer density across a finite geography – avoiding metro and suburban areas, and favoring population centers in rural areas.

The company has operations in select areas in the Midwest, the Southwest and the West. It just started doing acquisitions in the Midwest; in fact, just a couple months ago it bought Airband’s operations in Iowa. In its Midwest region, JAB is now close to 35,000 subscribers, mainly in Illinois, Iowa and Nebraska. JAB has around 40,000 users in the Southwest, most of them in Texas and Oklahoma. And out West it has more than 80,000 subscribers in Colorado, Idaho and Utah. Those operations offer services under a variety of trade names, including Digis, Skybeam, T6 and Rhino Communications.

The company, which has 530mHz of spectrum at its disposal, has 90mbps (software-upgradable to 180mbps) connectivity at tower sites. It offers residential users 5-, 10- and 15mbps package options. The cost of the services vary by market, but a mbps connect typically sells for around $40 a month, and users can opt to bundle in VoIP service for an additional $20 a month.