With new PE backing from Ares, Underline looks beyond Colorado Springs
CEO Robert Thompson noted it already has signed agreements with the cities of Fountain, Colorado, and Salinas, California for expansion projects and is having “active conversations” with a number of other communities across the country.
Underline Infrastructure‘s goal to introduce open access networks to the United States is moving forward, with the business stating that service is now available in its first area of Colorado Springs. It also announced new funding from private equity company Ares Management, adding to its growth war chest.
In October 2021, the corporation first announced its plans for Colorado Springs. At the time, CEO Robert Thompson told Fierce Underline that Underline’s business model is distinct from that of other open access providers in the country since it offers not only fibre to the home but also a uniform billing system and cybersecurity safeguards. Customers just connect to the network and select an ISP from a list of possibilities. He mentioned that the corporation had only recently begun construction and was planning to offer speeds of up to 10 Gbps for residential customers and 100 Gbps for enterprise subscribers.
Thompson told Fierce in an update its network in the city is now up and running. Residential customers currently have their choice of three different ISPs offering symmetric gigabit service for $65 per month. Underline has also onboarded the Catalyst Campus for Technology & Innovation as its first 100 Gbps customer and added Altia and the Colorado Springs Airport Peak Innovation Park to its roster of enterprise clients.
The CEO said the early response to its service has been extremely positive. “People have been blown away,” he stated. “Residential customers [are] using the word transformative, not us, about the change. The notion of being able to choose at your desktop who fulfills the internet access piece, it’s almost so revolutionary people have to think about it, like ‘wait, you mean I can change them?’”
Thompson also mentioned a new round of money from Ares Management, Underline’s newest private equity partner. While he did not disclose the amount of funding, he did say, “It’s more capital than I can spend in the next time.” Underline is Ares Management’s first investment in digital infrastructure.
Thompson stated that it has already inked agreements with the city of Fountain, Colorado, and Salinas, California for expansion projects and is in “active negotiations” with a number of additional areas across the country. He stated that it hopes to make announcements about its 2023 intentions later this year.
“What the country does not require is additional fiber superhighway capacity.” “We have a lot of that,” Thompson added. “What we do need is somebody that can use technology and private capital to actually partner with communities to build out the many regional and local community infrastructure to then attach to that national fiber superhighway system. So that’s where we’re focused.”
That said, Thompson said Underline knows it won’t be able to reach its entire 2,500-community target alone. So, in addition to building, owning, and operating infrastructure in certain markets, it also plans to license out its technology to “the right community partners.”
“There is a very substantial appetite, including in the capital markets, to build, own and operate these assets, but it’s also not my place to tell a given city’s leadership what they have to believe on the right way for the physical fiber to be owned,” he said. “Some communities will actually have the bonding capacity to build and own the fiber themselves and they want to do that.”
He continued: “I suspect for the next several years most of our community builds will be owned and operated by Underline. But to solve the problem in our country, mainly getting those communities the intelligent infrastructure that they need, we’ll absolutely serve the right communities with partners with technology and operational expertise if that’s what they need.”