Uniti Group NASDAQ: UNIT is prioritizing execution on its fiber expansion, hyperscaler opportunities and strategic alternatives during the second half of the year, President and CEO Kenny Gunderman said at the TD Cowen conference.
Gunderman said the company recently marked the one-year anniversary of its merger with Windstream and has delivered on several commitments made at the time of the transaction. Those included simplifying the prior corporate structure, pursuing operating synergies, combining wholesale capabilities and accelerating the Kinetic fiber buildout.
“Our priorities for the second half of the year are to just continue with the playbook that we have laid out,” Gunderman said, citing Kinetic construction, additional hyperscaler business and strategic execution.
Strategic Alternatives and Non-Core Assets
Gunderman said Uniti is “very active” in the mergers-and-acquisitions market, though he emphasized that the company does not face a self-imposed timetable to sell itself. He said management is evaluating the company’s intrinsic value, its public-market valuation and potential value that could be realized for shareholders through strategic alternatives.
While Uniti would generally favor a simpler structure over a more complex one, Gunderman said complexity would not rule out potential transactions. He pointed to joint ventures and other structures being used across the data-center and fiber-to-the-home industries. Uniti’s business was organized into Kinetic, Uniti Fiber, Uniti Solutions and Uniti Wholesale to preserve strategic flexibility, he said.
Gunderman also discussed the company’s plan to monetize between $500 million and $1 billion of non-core assets over a 12- to 36-month period. Potential assets include spectrum licenses, unused fiber, certain markets where the company does not expect to deploy fiber in the near term, and other properties.
He said the company is making “really solid progress” but stressed that the expected timeline is longer-term and that Uniti is pursuing transactions opportunistically.
Regarding Elliott Investment Management, which Gunderman said owns 20% of Uniti shares and holds a board seat, he described the firm as a constructive shareholder focused on maximizing shareholder value. He said Elliott views its investment more like a private-equity investment than a trading position.
Kinetic Buildout, Pricing and Customer Retention
Gunderman said Uniti increased its fiber build pace during the second quarter and raised the number of homes it expects to reach this year. The company built more than 50,000 homes in July, he said, adding that the current build engine could support an annualized pace of roughly 550,000 to 600,000 homes if the board elects to commit the associated capital.
He said roughly 25% to 30% of the recent capital-expenditure increase was tied to building more homes, while the remainder related to pulling forward pre-engineering and preparation for a potentially higher 2027 build level. He said higher customer-premises equipment and fiber costs have been incorporated into the company’s 2026 and 2027 planning assumptions.
On consumer fiber pricing, Gunderman said the company remains confident in its previously discussed expectation for 2% to 3% broadband average revenue per user growth in 2026 relative to 2025 and beyond. Consumer fiber ARPU declined 2.6% in the second quarter amid heightened promotional activity from wireless and cable competitors.
He said Uniti used some pricing flexibility to retain customers in the first half, while its customer-care and retention organization was still being established. The company has since implemented AI tools to monitor inbound calls, refine customer scripts and tailor offers based on competitor activity, Gunderman said.
Uniti also sees opportunities from value-added services, including Always On Wi-Fi and YouTube TV, as well as from upgrading customers to higher speeds. Less than half of the Kinetic base currently takes service of 1 gigabit or more, according to Gunderman.
Copper Strategy and Competitive Landscape
Gunderman said the company is actively migrating customers from copper-based DSL to fiber and has stopped selling DSL at roughly 800,000 locations as part of its copper-decommissioning strategy. While DSL churn may remain elevated as a result, he said Kinetic’s DSL ARPU rose 10% to 11% as the company increased prices for those customers.
The company is targeting fiber deployment toward markets with the greatest perceived competitive threat from overbuilders and cable operators. Gunderman ranked overbuilders as the primary threat, followed by cable, with fixed wireless and low-earth-orbit satellite services a distant third.
He said low-earth-orbit providers represent more of an opportunity than a threat for Uniti because the company supplies fiber for ground stations, data centers and backhaul. Uniti believes it can regain market share from fixed wireless and satellite providers as it extends fiber into more rural markets over the next several years, he said.
Gunderman said newer Kinetic construction cohorts are producing stronger penetration than earlier cohorts, supported by more targeted market clustering, local marketing and improved systems. If the company were to revisit its terminal-penetration expectations, he said the level would be higher rather than lower, though he did not change guidance.
Commercial Fiber and AI-Related Demand
Uniti reported record infrastructure bookings during the quarter, according to Gunderman, with demand coming from hyperscalers, neo-cloud providers and what he termed “superscalers,” or high-bandwidth customers such as SpaceX, Akamai, Anthropic, Uber and Netflix.
He said bookings reflected a healthy mix of lit and dark-fiber services, demonstrating the benefit of combining Uniti’s dark-fiber network with Windstream’s lit-fiber capabilities. The company is also seeing growing demand for wave services connecting data centers it has served through fiber construction in recent years.
Uniti does not intend to compete broadly on major nationwide routes, Gunderman said. Instead, its wave strategy focuses on differentiated Tier 2 and Tier 3 routes, unique data-center connections, network quality and customer service. He said pricing for 400G wave services generally ranges from $4,000 to $5,000, though it can vary materially based on route, customer and capacity needs.
For financing, Gunderman said asset-backed securities have performed better than expected and could be used for one or two deals annually. Uniti has previously discussed $5 billion of ABS capacity, which he said remains sufficient to fund the company’s plans.
About Uniti Group (NASDAQ:UNIT)
Uniti Group Inc is a real estate investment trust that owns, operates and acquires communications infrastructure assets across the United States. Established in September 2015 through a spin-off from Windstream Holdings, Uniti Group focuses on leasing fiber, small cell networks, cell towers and related infrastructure to service providers, wireless carriers and other enterprises requiring high-capacity connectivity. The company's assets are designed to support the growing data demands of residential, business and governmental customers, with an emphasis on long-term contractual lease arrangements.
Uniti's portfolio encompasses an extensive fiber network that spans metropolitan and rural markets, as well as a portfolio of wireless towers and small cell nodes that facilitate mobile network densification and help carriers deploy 5G services.
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