Written by Nathan Stubbs
Wednesday, 10 March 2010
After its first year of operation, Lafayette Utilities System’s fiber-to-the-premise telecommunications business is above its financial break-even target and ahead of its projected rollout schedule, according to Director Terry Huval. LUS Fiber’s initial feasibility study indicated that the business would need a so-called “take rate” of 23 percent in order for the business to break-even financially — meaning that 23 percent of customers offered the service would sign up for it. This amounts to a little more than 14,000 out of approximately 62,000 total potential customers in the city of Lafayette (approximately 51,000 of whom are residential), once the fiber rollout is complete.
“In the areas where we have done the most of our limited marketing, we are already well above that target,” Huval writes in an e-mail to The Ind. “We are opening up new areas for service every week, so naturally those early take rate levels are lower in those areas. But, we are pleased with the response we are getting. All indications are that we will easily meet all our financial obligations moving forward.” He adds that the business has also exceeded its projection of customers who buy all three services — phone, TV and Internet. LUS Fiber first began serving customers in February of last year.
With the project’s $125 million bond issue, LUS borrowed approximately $20 million more than it needed for the fiber project, which provided some cushion to paying off debt in the first two years as the business got ramped up. Due Nov. 1, 2011, is a principle and interest payment of $8.6 million, up from the $5.5 million owed this year. LUS Fiber will also have to cover that 2011 payment solely from its operating revenue.
Citing exceptions to public records law for competitively sensitive marketing information, LUS Fiber does not release specifics on its take rate or its number of customers. According to its three most recently completed monthly financial reports, for October, November and December 2009, the LUS Fiber business’ revenues exceeded its monthly operating expenses in two of those months (October and November). For October, monthly revenues totaled $1.64 million while operating expenses totaled $874,991. In December, total revenue was down due to a dip in wholesale receipts. Huval says this fluctuation reflects some of the cyclical revenue collecting and accounting inherent in the wholesale business.
|The fiber rollout is months ahead of schedule.|
The recent success is welcome news for LUS Fiber, which, despite its overall popularity, faced some strident critics and sputtered coming out of the gate. Financial reports showed that after its first four months of operation, LUS Fiber was taking in less than $50,000 in retail revenue (that number has risen to approximately $159,000 for December 2009). As for the feasibility goal of signing up 500 new customers each month, Huval says LUS Fiber first hit that goal in November 2009 and has maintained the pace through February of this year. “We are hitting that target consistently and are currently surpassing that target,” he says.
For Huval, Friday has become known as “fiber day.” It’s the day of the week that he huddles with the fiber business’ administrative staff for the latest progress reports. As of last week, Huval says most of the major conduit lines are completed throughout the city. LUS Fiber also has already begun serving small pockets of customers within the Phase 3 and Phase 4 areas of its rollout schedule — areas that weren’t originally scheduled to come online until 2011. The business is now confident it will be ready to serve the entire city by the end of July, nine months ahead of the original schedule. Until that time, LUS Fiber will be steadily building its service area. Huval indicated that the last areas likely to see service will be the northern edge of the city along Pont des Mouton Road, the neighborhoods behind the Heart Hospital on Kaliste Saloom Road, The Settlement and other neighborhoods along the southern end of Kaliste Saloom going toward Milton, and some areas along Pinhook Road near Broussard. Potential customers can find out if service is available for their home by checking the online “service finder” at LUS Fiber’s Web site at fiberforthefuture.com.
In nearing the finish line of the rollout, LUS Fiber is gearing up for a surge in its customer base. Customer sales reps are now working Saturdays, and Huval says while its full-time sales staff is in place, the business may reach out for more part-time help to meet the anticipated increase in calls. Among that staff are four door-to-door sales reps who came on board beginning in August of last year and have helped the business to step up sales. “That’s a very effective medium,” Huval says. “The dialogue between us and the customers has been very beneficial. We’re very pleased with that process.”
A federal jury found attorney Daniel Stanford guilty Friday afternoon on eight of 13 counts for his role in the Curious Goods conspiracy.
Lafayette City-Court Judge Francie Bouillion has served on the bench for two decades since winning a special election to replace Judge Kaliste Saloom when he retired in 1994.
The magazine's senior football writer also predicts a break-out year for Saints fourth-year running back Mark Ingram.
Gulf Coast ceremonies marking the ninth anniversary of Hurricane Katrina have begun.
The Louisiana Department of Wildlife and Fisheries says there is little known about the effects of tiger prawns on indigenous Louisiana shrimp. But, officials say the reports they're seeking will help state biologists monitor the distribution of the prawns and determine the possible presence of spawning populations.
Baltimore Ravens coach John Harbaugh rested his regulars and watched with delight as Ray Rice's backups ground out 214 yards rushing in a 22-13 victory over the New Orleans Saints on Thursday night.
Friday's Blogs from the Bog!
Google vs. Amazon in drone race; more deaths in Syria; Russia escalates Ukraine conflict and more national and international news for Friday, August 29, 2014.
High-profile criminal defense attorney Daniel Stanford awaits his fate in the Curious Goods conspiracy trial.
The Louisiana Department of Wildlife and Fisheries is set to put the kibosh on the legal ownership of monkeys trained to help the disabled, and the agency wants to know what you think.
A federal judge on Thursday asked lawyers battling over Louisiana's new, restrictive abortion law for an agreement that apparently could let clinics stay open — at least for a while — after the law takes effect Sept. 1.
An abortion rights organization wants a federal judge to block enforcement of Louisiana's new abortion law while its lawsuit to overturn the law makes its way through court.
Republican presidential prospects Ted Cruz and Bobby Jindal are planning to speak at an Iowa Christian conservative event in September.
The attention surrounding Victor White III has spiked with the release of last week’s autopsy report, which has raised a number of serious questions about the night of his death and has put the Iberia Parish Sheriff’s Office under an increased wave of scrutiny as more national media outlets are jumping on the story, most recently seen on MSNBC's The Rachel Maddow Show.
A group supporting taxpayer-funded private school tuition vouchers is appealing a federal judge's order that Louisiana must provide regular reports to federal officials on the state's voucher program.
The Discovery Channel has canceled reality TV star Will Hayden's popular "Sons of Guns" show after his arrest on an aggravated rape charge.
The LPSB will finally hear from the attorney it hired to investigate the superintendent at a special meeting Thursday at 4 p.m.
Authorities are investigating a report that a student there warned the principal of impending violence similar to that depicted in the movie "The Purge."
Saints cornerback Champ Bailey has played for more than a handful of playoff teams during a career that has seen him selected to 12 Pro Bowls.
Police say a 56-year-old Lafayette man walking behind a dump truck died when the truck hit him as it was backing up.
New Orleans Saints quarterback Drew Brees is a proud papa of new baby girl.
The books on Louisiana's last budget year have been closed, but it took a bit of borrowing from this year to make the numbers work.
The Iberia Parish Coroner responded Monday to the attention surrounding the questionable shooting of Victor White III, a black man from New Iberia who died April 2 while in the custody of local law enforcement.
Two months after lawmakers agreed to create a $40 million higher education incentive fund, no decisions have been made about how to divide the money.
With Drew Brees back healthy, the New Orleans Saints are free to work on the little things that can make the difference between a Super Bowl run and something less.