FTE Adds Construction to Its Fiber Diet

Network infrastructure solutions provider FTE Networks this week acquired Benchmark Builders, a construction management services company, in a move designed to provide customers with one source for integrated network infrastructure, technology and construction.

This comes at a time when municipalities and operators seek ways to accelerate approval to lay fiber due to local ordinances, owner apathy or layers of bureaucracy. Regions typically have their own rules for construction related to broadband access, small-cell deployment and other components of next-generation networks. And more than one third of building managers, for example, don't think broadband is important, Craig Thomas, senior director of international marketing at Calix, said earlier this month, citing company research. (See Urbanization Turns Copper Into G.fast Gold.)

By acquiring privately held Benchmark Builders of New York City for $75 million, FTE gains "economies of scale, synergies, complementary business activities, and new growth opportunities in strategic locations across the U.S. Benchmark helps FTE significantly expand its portfolio of sector expertise and enables the company to accelerate its penetration of the fast-growing market for data center construction," according to FTE's press release.

"One of the truly complementary components, because of the history of the [Benchmark] owners with our team and the various levels of expertise from engineering to construction which both groups hold, there's been a real collaborative effort as these opportunities have been identified," Kirstin Gooldy, secretary and chief compliance officer at FTE told UBB2020.

Telecom accounts for a growing amount of FTE business. It increased 119% to $3.8 million in the third quarter of 2016 compared with the year-ago period. In that quarter, a service provider awarded FTE a contract worth up to $12 million to install a fiber network, FTE said.

Expedited process?
As a standalone construction company, Benchmark outsourced up to one fourth of its revenue to companies that laid fiber, installed networks and provided other infrastructure services for data centers, service providers and cable operators. As one business, that income could now stay in-house, said Michael Palleschi, FTE's president and CEO, in an interview.

Having a contracting business also provides FTE the opportunity to pitch additional offerings -- such as its compute-to-the-edge network -- early in the construction process.

"The amount of work they subcontract to folks like us is significant; roughly about 15% to 20% of their revenue is subcontracted to companies like us. The second piece of it is our new compute-to-the-edge technology from subsidiary CrossLayer is focused on showing REITs -- or real estate investment trusts -- how to take data and monetize that, and make a revenue stream," he said.

Related posts:

• Urbanization Turns Copper Into G.fast Gold
• Open Fiber Expands With Metroweb Acquisition, Uses Huawei's Monitoring Tech
• Multiple Choices Answer Broadband Question: AT&T's Fuetsch

— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana.