Dark fiber providers may see $986M market as broadband data demand rises

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The never-ending hunger for higher speed broadband wireline- and wireless-based data services is driving new dark fiber services revenue. New data from IBISWorld revealed that by the end of 2012 dark fiber revenues will grow at an average annual rate of 3.7 percent, to reach $986.2 million.

"As the amount of data and broadband use has grown, demand for networks that support communication has increased as well, thus supporting industry revenue growth," said Nikoleta Panteva, senior analyst at IBISWorld.

Although dark fiber revenue slowed during the recent recession, Panteva said, "The combination of increased broadband connections and rebounding corporate profit has supported strong revenue growth during the past five years."

To expand their respective dark fiber holdings, a number of traditional and competitive service providers have been aggressively purchasing the assets of other service providers to provide a mix of retail fiber-based Ethernet to businesses and wholesale services to wireless operators.

On the incumbent side, CenturyLink (NYSE: CTL) and Windstream (Nasdaq: WIN) instantly beefed up their fiber holdings to serve larger business customers and bolster their Fiber to the Tower (FTTT) initiatives through their respective acquisitions of Qwest and PAETEC. Meanwhile, Level 3 (NYSE: LVLT) and Zayo have expanded their dark and lit fiber reach through their respective acquisitions of Global Crossing and the pending deal for AboveNet.  

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