Zayo piggybacks new enterprise, content providers deals on dark fiber backhaul builds

Zayo continues to gain momentum in the fiber-to-the-cell market (FTTC) with a number of major wireless operators, but those builds are being leveraged and extended to serve a host of other opportunities.

Dan Caruso, CEO of Zayo, recently told investors during the Morgan Stanley Technology, Media and Telecom Conference that the service provider's capital on FTTC builds is being used to satisfy network services for enterprise customers and, increasingly, content providers.

"A big part of when you're investing in these mobile infrastructure deals is to leverage that fiber for various purposes," Caruso said. "Tower companies talk about the number of tenants per tower and only have a few customers to sell to but we have a ton of customers to sell to."

Some of the deals it has won off some of its FTTC builds are in the health care and retail industries.

Some of its health care provider and retail customers have purchased dark fiber from Zayo to connect their facilities, using the existing FTTC network investments.

A major health care provider in Colorado moved its data center from its corporate headquarters into Zayo's data center and got dark fiber and wavelengths to connect up not just its main hospital in Denver, but also in Colorado Springs.

Likewise, Zayo has won dark fiber deals in recent quarters with retail companies, which are connecting up their data center facilities not only in their corporate headquarters location, but also across different parts of the country to get to key data centers that are in different time zones.

"Most of our revenue is not with wireless carriers," Caruso said. "I talk about mobile infrastructure a lot because that's where a lot of the capital is going in advance of small cells and C-RAN technology, but most of our activity has to do with the big Internet content companies and the companies that are scaling up rapidly for cloud from their corporate headquarters into their remote data center facilities."

Evidence of this trend was seen in its second fiscal quarter of 2016 results. During that period, Zayo said a number of new customer wins drove installs to $6.4 million and net installs to a near-record $2.2 million.

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Related articles:
Zayo's Caruso: Verizon's XO fiber acquisition won't change things much
Zayo net installs rise to $6.4M as provider narrows net losses to $10.8M
Verizon builds breadth, depth with XO fiber buy, but gaps still remain
Zayo, Crown Castle, other dark fiber providers could get revenue boost from C-RAN fronthaul, says Well Fargo
Zayo upgrades Forth Worth, Texas municipal network with dark fiber

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