Telecom assets that may have became one man's trash when the telecom boom era crashed in 2001 has become a treasure for the Zayo Group.
Helping to lead Zayo's treasure pick up is Zayo's co-founder and COO John Scarano. Always an entrepreneur at heart, Scarano was an early member of both Level 3 and MFS, which later merged with the former WorldCom and Verizon.
Currently operating four business units--Zayo Bandwidth, Zayo Colocation Services (zColo), Zayo Enterprise Networks and Zayo Fiber Solutions--the company has built its by purchasing various regional network assets that had gone onto the auction block. These units, which have been combined through the acquisition of smaller operators, are all focused on providing services to customers regardless of geographic location.
"What we have done is collected together sets of assets that were largely built during the telecom heyday period, but had been very regionally or locally managed and assembled them together into a platform that allows us to go to our customers in a similar way from a quoting perspective, service management and maintenance perspective," he said.
Key areas of growth continue to be enterprise Ethernet and wholesale wireless backhaul services in less competitive tier two, three, four and five markets that weren't on the radar screen of larger service provider network consolidators.
To serve these needs, Zayo has been enhancing its portfolio through internal growth and a targeted M&A strategy. Two deals that it has made include both Rochester, N.Y.-based American Fiber Systems Holding Corporation (AFS) and dark fiber provider AGL Networks.
With the acquisitions of AFS and AGL, Zayo created a new dark fiber division called Zayo Fiber Services (ZFS) selling to other service providers, wireless operators, education and large enterprises.
"AFS and AGL are very representative of not just the ability to sell and lease dark fiber and the expand the reach of our networks to serve more wireless carriers, but these are companies that have a lot of infrastructure and a lot of interesting markets," Scarano said. "AGL supports three markets with very dense networks in Charlotte, NC; Phoenix, AZ; and Atlanta, GA and AFS supports nine markets with very interesting networks, several of which overlap networks that Zayo has in place already."
While Zayo has been one of the consolidators of the competitive telecom market, he does not want in Colorado speak ‘get ahead of its skis' either. After initially launching the company through acquiring various assets to build its business, the obvious focus continues is around serving its customer base.
"At the moment we became an operating entity with customers, the first priority shifted from acquisition only in 2007 to now we have customers and they matter first," Scarano said. "So the question is how do we stay focused on the business and in parallel proceed with acquisitions? While we continue to pursue acquisitions, we're very respectful of our seven member board, our private equity funding sources and we only make recommendations that we believe we can manage and carry forward in an organized way."