Shentel’s CEO says data centers are a significant growth opportunity
Key Highlights
- Shentel estimates about 20 data centers are being built or are near its fiber network across its eight-state footprint.
- The company says negotiations with hyperscalers take time and discussions on multiple opportunities are progressing.
- Commercial Fiber revenue increased $1.2 million, or 5.9%, driven by enterprise and carrier demand.
- Third-quarter revenue rose 4.6% year over year to $93.9 million.
- Shentel raised its 2026 capital expenditure outlook while keeping revenue and adjusted EBITDA guidance unchanged.
Shentel continues to pursue the hyperscaler data center opportunity, citing several opportunities to extend its growing fiber network to support a growing base of centers. This concept has been an attractive business for many incumbent and competitive wholesale fiber service providers.
In the second quarter, Shentel signed a master service agreement (MSA) with an unnamed hyperscaler data center operator.
An estimated 20 data centers are being built or are near its fiber in the eight states it operates in today.
When asked for an update about its data center customer targets, Ed McKay, CEO of Shentel, told investors that “it takes time to negotiate contracts with these major hyperscalers.”
“Our discussions are ongoing regarding multiple opportunities,” he said. “They're progressing well. We still see this as a significant growth opportunity for us. I just don't have anything additional to share right at this moment.”
Commercial business lift
While the service provider could not share specific details about any data center revenue opportunities, Shentel’s commercial fiber business’ growth trajectory continued into the third quarter.
Driven by strong demand across commercial and enterprise customers, including wireless carriers and wholesale customers, Shentel’s incremental monthly sales bookings exceeded $185,000.
Shentel’s service delivery team installed $178,000 in new monthly revenue in the quarter, and its average monthly compression and disconnect churn remained low, averaging 0.5% over the last 12 months.
Commercial Fiber revenue grew $1.2 million or 5.9%.
“This growth was driven by recurring revenue growth in the enterprise and carrier verticals,” said James Volk, CFO of Shentel. “Combined, Glo Fiber and Commercial Fiber revenue grew 19.5% and represented 52% of consolidated revenue.”
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- Shentel's CEO: Residential Glo Fiber and commercial fiber to surpass incumbent revenues next year
Maintaining 2026 guidance
For the third quarter, Shentel reported total revenue rose 4.6% year over year to $93.9 million.
Revenue and Adjusted EBITDA guidance remain unchanged.
The company is updating its 2026 capital expenditure guidance, net of government grant reimbursements, to $255 million to $275 million, up from $220 million to $250 million.
Shentel said revised outlook reflects both a projected increase in Glo Fiber homes passed from 510,000 to 517,000 by the end of 2026 and changes in the timing of some subsidy reimbursements, which are now projected to extend into 2027.
By the end of 2026, Shentel expects to be substantially complete with its planned network expansion projects.
Volk said Shentel is “reiterating our 2026 operating guidance” and that we “continue to expect revenues of $370 million to $377 million and adjusted EBITDA of $131 million to $136 million.”
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About the Author
Sean BuckleySean Buckley
Sean is the Editor-in-Chief of Lightwave. He establishes and executes Lightwave's editorial strategy across its website, email newsletters, events, and other information products. Before coming to Lightwave in July 2023, he served as editor of Broadband Communities. Earlier, he served as senior editor of FierceTelecom and the editor of the former Telecommunications Magazine. He got his start in the optical industry in 1998 when he became the editor of enterprise and optical networks at Information Gatekeepers. He has a BA in English from the University of Massachusetts, Boston, and lives in Dracut, Mass, with his wife, two sons, and his cat, Dove.
