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Zayo's fiber network is now connected to 10,000 buildings

Fiber builds driven by customer demand
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Zayo Group on Tuesday reached its 10,000 on-net building milestone, enabling it to offer high bandwidth services to a large mix of enterprise and wholesale service provider customers.

The service provider's footprint now stretches across 45 states and Washington, D.C., in addition to seven countries. This on-net building presence is supported by 67,000 route miles and 4.7 million miles of total fiber.

The on-net reach has become a major piece of Zayo's Bandwidth Infrastructure business, accounting for $918 million in annualized revenue and $490 million in adjusted EBITDA.

A big part of the service provider's network expansion came from customer requests for more bandwidth. Zayo's customer base includes a mix of wireless operator Fiber to the Tower (FTTT), financial service private networks, and regional education networks. It also provides connectivity to major data centers and to other service providers.

Glenn Russo, executive VP at Zayo, said in a release announcing the milestone that the company's growing base of on-net buildings will enable it to address new customer needs as they arise.

"This reach allows us to deliver comprehensive solutions for our customers and provides a foundation to economically expand to many more locations over time," he added.

To get to the 10,000 on-net building mark, Zayo has set itself on a path of organic growth and inorganic growth via acquisitions of other like-minded fiber infrastructure providers.

Since the company was launched by one of Level 3's co-founders, Dan Caruso, it has been a consolidator in the fiber network market, purchasing 22 service providers, including most recently First Telecom Services, a deal that it will complete at the end of the year. By purchasing First, a company that it had already rented fiber from to connect its own customers, Zayo gained an additional 8,000 route miles of fiber and about 500 on-net buildings.

Zayo made its largest acquisition earlier this year of AboveNet, which gave it an expanded domestic U.S. metro and European network presence. The acquisition of AboveNet drove up Zayo's sequential first fiscal quarter revenue by $120.1 million to $229.7 million.

One of the many advantages of AboveNet is that their metro networks usually include 432, and in some cases 864, fiber strands in each cable. This high fiber count allows the provider to quickly add new customers with incremental construction including laterals that connect to each customer premises.

Following AboveNet, Zayo also purchased FiberGate and USCarrier in August and October, respectively.

By continually expanding its fiber network, Zayo has become a sizeable alternative wholesale and retail service provider challenger to Tier 1 U.S. incumbents AT&T (NYSE: T), Verizon (NYSE: VZ) and CenturyLink (NYSE: CTL). In recent months it has garnered agreements with other competitive carriers including Cbeyond and middle mile provider EAGLE-Net.

For more:
- see the release

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