More Than 25,000 Alaskans Get Access to High-Speed Internet Thanks to Alaska Communications

Rhea-AI Summary

Alaska Communications is doubling down on its focus to provide Alaskans with broadband solutions, deploying high-speed internet to over 25,000 locations through the CAF II program. The company plans to invest $40 million in 2024, including in its state-of-the-art fiber to the home network, offering the fastest upload speeds in Alaska.

Positive

• Alaska Communications has successfully deployed high-speed internet to over 25,000 unserved or underserved locations since 2017 through the CAF II program.
• The company invested $65 million in capital in its network and facilities last year, and plans to invest another $40 million in 2024, including in its state-of-the-art fiber to the home network.

Negative

• None.

Insights

Telecommunications Analyst

The recent capital investments by Alaska Communications signal a substantial commitment to expanding broadband access in Alaska, a region historically challenged by its vast and rugged terrain. From a telecommunications perspective, the deployment of high-speed internet to underserved areas not only enhances connectivity for residents and businesses but also presents a competitive edge for Alaska Communications in a market with limited players.

Investing in fiber to the home (FTTH) technology is particularly noteworthy, as it offers the fastest upload and download speeds available, which is critical for modern applications such as telemedicine, remote work and online education. This infrastructure upgrade could lead to an increase in customer satisfaction and retention and potentially attract new customers, thereby increasing the company's market share and revenue streams.

However, the high costs associated with deploying fiber-optic networks in remote and challenging geographies must be weighed against the long-term return on investment. The $65 million investment in 2023 and the planned $40 million in 2024 suggest a strong balance sheet and a strategic vision, but it will be important to monitor how these capital expenditures impact the company's financials in the coming quarters.

Market Research Analyst

Alaska Communications' strategic focus on deploying broadband to new locations can be seen as a response to the increasing demand for high-speed internet nationwide, particularly in the wake of the pandemic which has accelerated digital transformation. The expansion into communities such as Delta Junction, Fairbanks and Homer reflects a targeted approach to market penetration, likely based on demographic and economic research indicating where service enhancements could be most impactful.

By offering speeds up to 50 Mbps, the company is addressing a critical need for reliable and affordable internet, which can have a significant impact on local economies by enabling e-commerce, telecommuting and other digital services. This initiative may also align with governmental goals to bridge the digital divide, possibly positioning Alaska Communications to benefit from federal funding or subsidies aimed at expanding rural broadband access.

It is essential to analyze how these developments align with consumer trends and competitor strategies within the telecommunications industry. The success of this investment will largely depend on the company's ability to convert infrastructure improvements into customer growth and increased profitability.

Financial Analyst

The financial implications of Alaska Communications' investment in broadband infrastructure are multifaceted. On one hand, the $65 million capital investment in 2023, followed by a planned $40 million in 2024, indicates a robust capital expenditure program aimed at long-term growth. This level of spending suggests confidence in the potential for market expansion and customer base growth.

For investors, the key metrics to watch will be the return on capital employed (ROCE) and earnings before interest, taxes, depreciation and amortization (EBITDA). These will indicate whether the investments are translating into increased operational efficiency and profitability. Additionally, the impact on the company's debt levels and liquidity ratios will be critical to assess the sustainability of the investment strategy.

Given the capital-intensive nature of the telecommunications industry, it is also important to consider the potential for increased depreciation costs associated with the new infrastructure, which could affect net income in the short to medium term. However, if managed effectively, these investments could lead to significant competitive advantages and shareholder value over the long term.

ANCHORAGE, Alaska--(BUSINESS WIRE)-- Through capital investments and innovative technologies, Alaska Communications is doubling down on its focus to provide Alaskans with broadband solutions that meet the demands of today’s fast-paced world.

An Alaska Communications technician installs service. (Photo: Business Wire)

Since 2017, the broadband provider has deployed high-speed internet to more than 25,000 unserved or underserved locations, through the CAF II program. In 2023, it brought affordable, reliable, high-speed internet to new locations in Delta Junction, Fairbanks, Nenana, North Pole, Salcha, Nikiski, Anchor Point, Homer, Soldotna and Ninilchik, offering speeds up to 50 Mbps.

“One of the reasons I joined Alaska Communications is because of the tremendous opportunity we have to improve Alaskans’ lives by providing affordable, reliable broadband,” said Matt McConnell, Alaska Communications president and CEO. “It’s hard to imagine life without reliable internet, but for many Alaskans, especially in rural areas, it has been the status quo. We look forward to continued investment in strengthening and expanding our network.”

Last year, the company invested $65 million in capital in its network and facilities. In 2024, the company plans to invest another $40 million.

Among these investments is Alaska Communications’ state of the art fiber to the home network, which currently delivers the fastest upload speeds in Alaska. In the last two years, Alaska Communications deployed fiber to the home to about 10,000 homes in Fairbanks and Anchorage, along with a fiber build to a multi-dwelling unit in downtown Juneau. The company’s fiber to the home network differs from other hybrid fiber networks in that it extends the fiber to each individual building. With other hybrid fiber networks, homes are connected to the fiber line via a copper cable, and multiple homes share the same line, so speeds may fluctuate. Read more about the company’s work in the Anchorage Daily News.

“Fiber is the gold standard but we are always focused on deploying the right technologies, like fixed wireless, which can be better suited for certain environments,” said McConnell. “We’re planning a fixed wireless pilot in Juneau that would deliver speeds up to 300 Mbps.”

The company is also participating in the Alaska FiberOptic Project, a first-of-its-kind collaboration with Alaska Native Regional Corporations and tribal entities that support communities along the Yukon and Kuskokwim Rivers. The project will bring high-speed fiber internet to up to 21 communities for the first time, creating new economic opportunities for rural residents. Fiber construction in the Yukon River will commence this summer.

About Alaska Communications

Alaska Communications, an affiliate of ATN International, Inc. (NASDAQ: ATNI), is the leading provider of advanced broadband and managed IT services for businesses and consumers in Alaska. The company operates a highly reliable, advanced statewide data network with the latest technology and the most diverse undersea fiber optic system connecting Alaska to the contiguous U.S. For more information, visit www.AlaskaCommunications.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240130813623/en/

Heather Marron

Manager, Corporate Communications

Heather.Marron@acsalaska.com

Source: Alaska Communications

FAQ

What is Alaska Communications doing to improve broadband solutions in Alaska?

Alaska Communications is doubling down on its focus to provide Alaskans with broadband solutions, deploying high-speed internet to over 25,000 locations through the CAF II program.

How much did Alaska Communications invest in its network and facilities last year?

The company invested $65 million in capital in its network and facilities last year.

What are Alaska Communications' plans for investment in 2024?

The company plans to invest another $40 million in 2024, including in its state-of-the-art fiber to the home network, offering the fastest upload speeds in Alaska.