LP Broadband High Speed Internet News

LP Broadband loads wireless network base
Acquisitions extend geographic reach, double subscribers
08/18/2006

Source: Northern Colorado Business Report
Author: Kristen S. Bastian

In just a few short months, fast-moving LP Broadband Inc. has more than doubled its customer base.

The Loveland-based wireless Internet service provider recently closed on two acquisitions, bringing its total customers to 3,000.

The first acquisition was of 400-customer Skybeam.net Inc. The Loveland-based wireless ISP provided service to areas in northwest Fort Collins and around Carter Lake. LP began serving Skybeam's customers in July.

The company announced its second acquisition in mid-August. The acquired company, Digis Networks, provided LP with an additional 500 residential and business clients. The added coverage areas included sections of Fort Collins, Wellington, Windsor and Severance.
LP, founded in 2003, is realizing its goal of "being a real alternative to the Qwests and Comcasts of the world," President Wilson Spence said. The company now serves clients from north Longmont to Bellevue, Carter Lake to Severance and many areas in between. It not only serves customers looking for an alternative to one of the larger carriers, but also customers the larger carriers won't reach.

"We're going to expand geographically," Spence said, outlining a plan for expanding LP's reach along the U.S. Highway 85 corridor, eastern Colorado and eventually into southeast Wyoming and western Nebraska.

LP provides its broadband service wirelessly. Customers install a receiver about the size of a 1980's cell phone on their house or building. The receiver connects with an access point, which is either hard wired or wirelessly connected to LP's system. The system and technology is referred to as a canopy system.

The system is preferable for wireless Internet access, according to Spence. If there is an issue with one access point, only the receivers using that point are affected, rather than the entire system.

"With Digis, they already had some canopies in their system," Spence said.
The company has already replaced some WiFi systems included in the acquisition, but is planning on leaving others in place.

H-P, Agilent vets
A familiarity with the technology is essential in the ISP industry. LP's executive team is made of a group of former Hewlett- Packard Co./Agilent Technologies employees. Spence, along with CFO Scott Perich, Mark Schleiger, vice president of operations and Jerry Schleiger, infrastructure manager, all worked together on a team DSL team before Spence started LP.
But having knowledge of the systems and proving that knowledge are two different things. Getting a start in the competitive ISP industry can be hard.

"The first year, nobody would touch us on the business side," Spence said.
Currently, about 10 percent to 15 percent of LP's clients are businesses. Spence would prefer to see the business customer base grow to 25 percent. Having a good mix of business and residential customers is beneficial since business customers are typically using the service during the day and residential customers in the evening, balancing the use of the system.
Spence's goal is to expand to 4,500 customers by the end of the year and to double that by next year.

"This year was the year of the acquisition, as will be the next year and the next year," he said. Skybeam was LP's first buyout.

Not all growth will be by acquisition. For LP, growing organically is important, too. Growing by acquisition comes with a unique set of complications. Systems, from infrastructure down to billing, must be reconciled.

In addition to growing geographically and growing its customer base, LP is also growing its services. The company will begin offering voice over Internet protocol by the end of this month.
The team expects to continue to add services, but didn't specify what could be next. In the fast-paced technology realm, it's often a case of upgrade or die. Upgrades and additional offerings are capital-intensive projects, a fact that is fueling consolidation.

Consolidation is a major trend in the ISP industry. The investment to get beyond several hundred customers is not small. "A lot of companies can't get to the next step," Wilson said. "We made that jump a long time ago and now we're making the next jump."

The competition Frederick-based Mesa Networks, which serves about 7,000 customers along the Front Range, has found gold in the acquisition market. Early on, much of the company's growth was organic. But as the market became more competitive, the organic growth slowed. More recently, Mesa has grown through acquisition.

Just last year, the company purchased Peak Internet Solutions. The acquisition gave the company a strong presence in Colorado Springs. The company was ranked the No. 5 fastest-growing company in Northern Colorado by the Business Report's Mercury 100 awards.
Greeley-based Whatwire Broadband isn't one that will be left behind, either. Bud Stanley started the company in 2003 with his son, Rob. Bud Stanley opened Stanley Commercial Radio in 1956 and sold his network to Nextel in 1990.

Whatwire mostly serves customers east of Interstate 25 out to Kersey and as far south as Platteville. The company started small, but has made several upgrades along the way. "It's a rather expensive process," Stanley said.

Bigger pipe
The company recently installed a larger pipeline, increasing the size of its broadband. The upgrade will allow Whatwire to expand without risking loss of service quality. Right now, Whatwire serves about 850 customers, but plans to see some growth soon.
"All our growth up to this point has been organic," Stanley said. However, the company is in discussions to pick up some smaller providers. Stanley estimates that the company will grow its user based by 20 percent to 30 percent with a couple of the deals currently in the works.
"Conversely, we've got people trying to buy us," he said. Stanley doesn't rule out the possibility that Whatwire might get picked up, but that isn't keeping the company from expanding vertically.

Stanley recently purchased a new property for Whatwire, moving the company from downtown Greeley to west Greeley. The property included the tower that the company uses to provide its customers with service. Several cell phone companies also use the tower.