Lumos has a 10,907-route-mile fiber-
“We build the infrastructure,” Tim Biltz says. “We’re the new roads” for data traffi c.
optic network serving 26 markets in seven states. That network includes an 822-mile expansion in the Richmond area and Hampton Roads. It was completed during the past three years as the result of separate projects serving two customers, HCA Vir- ginia and a major wireless phone company that Lumos declines to identify. The expan- sion offers Lumos the opportunity to serve other potential customers near the network that want faster internet and better ways to handle their data. The company also provides private networks to customers that have multiple locations. Lumos also has made two recent acqui-
sitions. One was the purchase of Raleigh, N.C.-based Clarity Communications, a fiber network company with experience serving military installations. Lumos estimates that 409 military bases are within its network footprint. The second deal involved DC74 Data Centers in Charlotte, N.C. The two deals added seven data centers to Lumos’ existing group of seven. The company now connects to a total of 43 data centers. Lumos’ expansion into Hampton
publicly traded company in 2011 by NTELOS Holdings, the parent company of the Ntelos Wireless phone system. Nearly six years later, the Ntelos brand
has disappeared. The company was sold last year for $640 million to Edinburg-based Shenandoah Telecommunications. Lumos is being sold, too, but it expects
its name recognition to grow. EQT Infra- structure, a unit of the Swedish private equity firm EQT, plans to buy the company for $950 million in cash, $18 a share. If all closing requirements are met, the acquisi- tion is expected to be completed during this year’s third quarter. Biltz says the EQT deal will allow it to
continue to pursue a growth strategy that is already underway.
Roads has presented it with a huge new opportunity. Its network there lies within a half mile of the Virginia Beach landing site for undersea cables. (Two cables, MAREA from Spain and BRUSA originating in Bra- zil, are expected to become active over the next 12 months.) Lumos will offer an alter- native route to cable users wanting to con- nect with data centers in Ashburn, known as the Data Center Capital of the World. Rather than follow heavily used fiber routes along Interstate 95, Lumos’ path will follow I-64 and Route 29 to Ashburn. The route also provides access to data centers in other cities along its path, including Richmond. Before becoming president and CEO
of Lumos, Biltz was chief operating officer of SpectraSite Inc., a publicly traded wire- less and broadcast signal tower company. He also is a former director and chairman of the board of IPCS Inc. and served on the NTELOS Holdings board from 2006 to May 2014. Biltz lives in Charlotte, N.C., with his
wife and two sons. A history buff, his goal is to take his family to all of the U.S. National Parks during their summer vacations. The Lumos CEO acknowledges that
the company’s transition has been tough at times and praises the commitment and
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perseverance of his 600 employees. “There are many people that work
for Lumos today that have told me they thought they were being cast away” when the company was spun off in 2011, Biltz says. But today, “they’re so happy they landed in this lifeboat. They’re very excited to have gone through this.” Virginia Business interviewed Biltz at
his Waynesboro office in mid-April. The following is an edited transcript.
Virginia Business:[Who are your primary customers?] Biltz:We have two main customer seg- ments [in the company’s data business, wireless carriers and enterprises]. With our wireless carriers … we bring the backhaul [the fiber connection to the core wireless system] to the towers. So, as opposed to fighting the wireless replacement [of landline phones], we embraced it. We do think it’s the best and most friendly way to bring broadband services to many parts of the country. We enable the wireless carriers in that technology, and once we built those networks for the wireless carriers, we began offering enterprise services: high-end private networks and high-end Ethernet services … to what we like to call the “large locals” like banking, local government, midsize [compa- nies] and universities.
VB: Let’s talk now about the acquisition by EQT. Why did Lumos decide to sell? Biltz: There wasn’t a lot of interest in the company in 2012 or ’13 because 90 percent of our business was in [long-term] decline. Revenues were dropping, and cash flows were dropping … Fiber has become very strategic to many companies because they’re mission critical. Companies like Google, Facebook, Amazon and Netflix are big consumers of these products for content, delivery and connectivity, and the wireless operators also are investing heavily. There’s been a lot of consolidation in this industry. We expected [inquiries from potential buyers] to come and they did. We had conversations, I think, with [more than 10] companies … EQT is a very well-known private equity firm that is based in Stockholm, and a few years ago it decided to make a major move into the U.S. EQT created a $4 billion infra- structure fund, and we’re going to be the first investment in that fund. ... They want
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