USOL Hits Stride, Targets Existing Markets in 2001

The company, through its subsidiary, US Online, has contracted with apartment owners and managers to provide local and long distance telephone service, cable television service and high-speed Internet access to apartment communities in the company's seven major markets, including, Austin, Dallas-Ft. Worth, Denver, Houston, Portland, San Antonio and Washington, D.C.

USOL President and CEO Rob Solomon told GlobeSt.com that company growth in 2001 will come from both existing properties and new construction that USOL has targeted to offer its telecommunications services. However, Solomon explains that only one-third of the companies more than 50,000 voice, video and data passings have come from new construction.

"We look to take advantage of acquisitions in existing markets," says Solomon. "We tend to go after higher profile communities which contain at least 180 units." USOL currently has agreements with more than 40 owners of multifamily properties including, Equity Residential, AMLI, Gables, Walden, Aimco, Lincoln Property Co., Sentinel and Camden. "More than 80% of our passing and subscriber base reside in Texas," says Solomon. In the final months of 2000, US Online had picked up several large contracts including, Oakwood Worldwide, owner of the 308-unit Oakwood Austin, and an Atlanta-based company that owns Columbia at Greens, a newly constructed 232-unit complex in Houston.

If the competitive market for the multifamily tenant continues, it will work to the advantage of US Online's future growth, says Solomon. "The apartment industry is extremely competitive. Landlords are forced to compete for residents on the basis of price and location. More than ever landlords are looking to amenities and value added services that serve to promote occupancy, improve tenant retention and reduce churn," says Solomon.

Solomon says US Online offers tenants the advantage of leading-edge technologies in a bundled service offering. "One bill, one call center," explains Solomon. For the landlord, U.S. Online is an attractive package as well, says Solomon. "Our business plan is unique in that our agreement with landlords reads like a partnership agreement," says Solomon.

"We look to the landlord and their on-site leasing and management staff to provide the up-front marketing support. He said the US Online services are generally offered at the time of the lease and used as a closing tool by the on-site staff who, in turn, are compensated by USOL.

"Landlords are motivated in that they participate in our revenue streams through revenue share agreements that typically scale so that the greater the subscriber penetration level, the greater therevenue share," says Solomon. "It's really the ultimate win-win relationship."

USOL Holdings, a provider of bundled high-tech solutions for the multifamily sector, had been founded in 1994 by a group of real estate professionals. The company also owns TheResidentClub, which develops Internet platforms that provide a range of private-labeled online solutions for MDU communities and other residential markets. In October, the USOL's subsidiary, US Online, had been selected Broadband Operator of the Year, at the 11th Annual Private and Wireless Broadband Conference. The selection panel included analysts, journalists, consultants and industry leaders for companies providing cable service to multifamily units.