As cities continue to grow, more and more people find themselves living in multifamily properties— be they apartments and condos to townhomes and duplexes or other multi-dwelling units (MDUs). According to the United Nations, 68% of the world population is projected to live in urban areas by 2050. Residents of these MDUs will require the highest level of connectivity to support all of their favorite gadgets and streaming needs.
So it has many in the fiber industry considering how they can seize the opportunity to provide MDUs with fast, reliable broadband access through all-fiber networks. While fiber-to-the-home has taken off in single family homes, it has yet to catch on in MDUs.
Michael Render, founder and CEO of RVA, LLC Market Research, said adding fiber in MDUs can add 3.4% of value to condominiums and 9% of value to apartments. While fiber providers understand this value, because fiber is an “invisible” amenity, it’s harder for contractors to immediately realize its value. Renters, on the other hand, do. Render said data shows only 40% of MDU owners and renters are prompted by property owners/sellers about internet connectivity.
“[Renters and MDU owners] understand the value of fiber,” he said. “As can be seen in a list of amenities, it comes out No. 1. But because internet is not a visible prospect, as is granite counter tops or the view out the window, it is important for property managers to advertise it, demonstrate it and talk about it.”
This is why many in the industry are advocating for providers to be proactive in getting property owners and developers to understand the need for fiber.
“Really, 100% of new MDU construction should have fiber,” OFS Senior Director of Solutions and Professional Services John George said at a 2019 Fiber Connect panel on MDUs and fiber. “If you have areas of your community with new constructions that aren’t [fitted for fiber], speak up and advocate for fiber-in-the-building.”
Typically, MDUs—both newly constructed and older—are outfitted with some sort of internet connection. Buildings are often set up to allow residents to simply hook up their equipment to providers available in their area, meaning individual renters do not have to install their own cables each time they move in or out.
Because of this set up, fiber experts believe MDUs present an amazing opportunity for providers. Jeff Kuenne knows this better than most. Kuenne is the vice president of ALLO Communications, a telecommunications provider based in Western Nebraska. When they started building out their fiber network in Nebraska, they were mostly connecting single family homes in rural areas.
Then, a few years ago, Kuenne said they received a call from city officials in Lincoln, Neb., home to the University of Nebraska-Lincoln and the state capital. Internet options were poor and the city of 280,000 needed more options. Keunne said ALLO jumped right in to accommodate the market with a 100% underground construction three-year plan, much of which included MDUs.
Having multiple units within a single building meant more customers per installation.
“As we took off, we had to dedicate a portion of our company to focus on MDUs,” he told the audience at the 2019 Fiber Connect panel. “The value of an MDU subscriber is arguably higher than a single family subscriber. Cost-wise the difference is dramatic—it’s far less expensive to build a living unit in a multi-family setting than a single family home. It solidified for us our strategy.”
Dan O’Connell, vice president of consumer sales at CenturyLink, said his company saw a similar opportunity. In the past few years, the company started investing more heavily into residential spaces, a portion of which included MDUs. The strategy was to double down on creating better connectivity to people living in a variety of homes.
They started retrofitting older MDUs with their fiber, but they also started approaching developers before new MDUs were built. They found most developers considered connectivity into their building as an afterthought, and didn’t realize making time for fiber deployment during the building process could be beneficial for the future residents.
“I think a lot of developers don’t understand how much time is needed to get it right,” O’Connell said at the 2019 Fiber Connect panel. “Many of you who’ve dealt with MDU or single family developers know sometimes the telecommunications and cable solutions are at the end of the priority list of what they need to get done. There’s an assumption we’re all going to be there with the right technology and the right products and services, and there isn’t concern about our limitations.”
He said once he works with developers to explain how long the fiber deployment process should reasonably take, usually they understand what a perk having a fiber system in their building really is. The fiber powers in-unit mounted CPE modems with private Wi-Fi credentials. The moment residents move in, they have access to high speed internet. That, O’Connell said, can be an attractive feature for potential renters.
“We place the fiber, power it and activate the ONT so when you move in as a resident, you can press on,” he said. “No contract, no hassle. It’s instant and immediate. It’s truly a great customer experience.”
Mike Wolf, director of fiber and access planning at Cincinnati Bell, said it’s equally important to think about deploying fiber in older buildings as well. In 2008, the company realized the MDU market was severely underserved and met with some of the major property owners in Cincinnati. One of the greater challenges was establishing fiber-to-the-unit in older buildings.
MDUs make up about 20% of the housing market there, with a majority built between the 1950s and 1980s. As the city begins modernizing a lot of its infrastructure, Wolf said many properties are turning to fiber.
Deploying the technology was challenging and took some problem solving—includig building out fiber sites on the side of a building and running exterior wires. Then they had to install fiber-in-the-unit, which required a resident purchasing the service and allowing them to enter or waiting until a unit became vacant.
“We asked, ‘How do I get into these buildings where I have fiber on the side of the building that can get me into the unit eventually?’” he told the audience at 2019 Fiber Connect panel. “We didn’t jump in and do the whole building at once. That sounds like a coordination nightmare, but we were a good partner and the property owners have made it a success story for us today.”
Part of their strategy was using marketing to advertise the presence of fiber in the building. So when one person would sign up for Cincinnati Bell’s fiber services, they would try to get more customers on at the same time to streamline the installation process.
All agreed that MDUs can act as a valuable investment for fiber providers, and that working with community stakeholders is extremely important—especially as more residents understand the value of fiber.
“A lot of progress has been made to make the deployment a lot more cost effective,” George said. “It really resonates now with the public in ways that it didn’t years ago. The general public understands what fiber is and what it can do.”