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Press Release -- February 25th, 2011
Source: Tech Valley Communications
Tags: Expansion, Metro Fiber, Video

Tech Valley Communications grows sales, staff on the ‘last mile’ – Business Review

Tech Valley Communications will increase its work force from 60 to 80 employees this year and invest $5 million to expand its 450-mile fiber-optic network.

Three months after Riverside Partners, a Boston private-equity firm, took a majority stake in the company, CEO Kevin O’Connor said Tech Valley Communications is positioned to grow quickly.

Tech Valley finished 2010 with $15 million in revenue. But O’Connor believes fiber optic network expansions in upstate cities and future acquisitions will boost revenue to more than $50 million in five years.

“Now we have a partner behind us with a significant amount to invest,” O’Connor said.

The company, which began as a reseller of the Verizon network in 1999, is gearing up to gain market share in one of the last remaining battlegrounds of the telecommunication industry.

The battleground is known in the industry as the “last mile,” or metro fiber. Tech Valley plans to increase its fiber network, enabling more business and office buildings to connect to information from data centers, cell towers and the Internet.

The demand for bandwidth and high-capacity voice and data services is at an all-time high. Law firms, hospitals, engineering companies and technology startups have developed a unquenchable thirst for information.

The potential growth is what caught the attention of Steven Kaplan, a general partner at Riverside Partners.

“With all of the iPhones and iPads, the amount of video and data streaming we are using, there is a real need for bandwidth,” said Kaplan, whose company typically invests $10 million to $100 million in technology and health care companies for a five- to six-year period.

Fiber-optic lines are a much more cost-effective and efficient way of delivering that capacity than traditional copper lines, Kaplan said.

“And no one has the fiber assets that Tech Valley has locally,” Kaplan said.

Tech Valley currently owns and operates a 450-mile fiber network that runs from Catskill to Saratoga Springs. It has more than 500 commercial customers in the Albany area alone.

Its customers range from state government and 20- to 30-person lawfirms to Albany Medical Center, which has more than 5,200 full-time employees.

The average monthly revenue per user runs from $1,100 to $1,200.

To this point, Tech Valley Communications’ biggest problem has been its lack of capital to expand, Kaplan Said.

“They haven’t been able to grow,” he said.

O’Connor said his company plans to expand its fiber network by 50 to 60 miles this year.

Expansions could include Saratoga County, Glens Falls, parts of Vermont and southern New Hampshire as well as the Hudson Valley and Massachusetts.

“We are not going to be in Boston or New York City, but we believe we are in a strong position to expand into second- and third-tier cities throughout upstate and New England,” O’Connor said.

The telecommunications industry has seen a lot of acquisitions in the past year.

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