Zayo fortifies fiber diet with AFL, AGL

Sizing up the deals:
Zayo in 2010 continued to expand its fiber network through targeted acquisitions, including two competitive fiber providers: American Fiber Systems (AFS) and dark fiber provider AGL Networks.

With AGL, Zayo added about 850 more route miles to its fiber footprint in addition to 270 buildings to its network.

What's significant about these deals?
Each of these acquisitions reflect the idea that where there's fiber, there's opportunities to provide wholesale fiber-based wireless backhaul to wireless operators and retail Ethernet services to enterprise business customers.

By purchasing American Fiber Systems--its fifteenth since its inception in 2007--Zayo added another 800-plus miles of fiber route miles in six new metro markets, including Boise, Kansas City, Las Vegas, Nashville, Reno and Salt Lake City. Perhaps even more compelling, the acquisition enabled to gain presence in nine markets, six of which were entirely new to Zayo.

No less important was its acquisition of AGL Networks. With AGL, Zayo added about 850 more route miles to its fiber footprint in addition to 270 buildings to its network in Atlanta, Phoenix and Charlotte. It also came with 20-plus dark fiber customers in high-growth vertical market segments such as service providers, government/enterprise, wireless providers, data center providers and financial houses.

But the AGL acquisition wasn't just about expanding its fiber network base. With the majority of AGL's business being prompted Zayo to create a new division focused on selling dark fiber--Zayo Fiber Solutions (ZFS).

Along with making these acquisitions, Zayo has continued to grow out its network presence organically.

Taking a "success-based capital investment approach" to building out its network, Zayo continued to expand its network footprint throughout 2010, adding 946 new on-net buildings and 789 towers on a success basis during 2010 and has an additional 754 towers currently under construction.

Not surprisingly, Zayo is leveraging its fiber to the cell tower buildouts to expand its fiber density and reach in a number of markets, including Minneapolis-St. Paul, Memphis and central Pennsylvania.

Chris Morley, CFO of Zayo Bandwidth said its 1,700-mile network expansion throughout Minnesota to serve a large wholesale wireless operator client with a fiber to the cell site was an example of such an investment.

"There were three factors: one large fiber to the tower deal with a number of anchor clients that contributes 1,000 miles of network in the greater Minneapolis area," he said in an interview with FierceTelecom. "That in conjunction with our AFS acquisition and our stimulus award in Anoka County delivers about 1,700 route miles, which is pretty dense throughout that Minneapolis-St. Paul area."

With success-based growth as its foundation, Zayo will likely continue to grow its fiber network in 2011 to meet the many diverse opportunities that reside in its current markets and new ones where it's seeing new demand.   

Zayo fortifies fiber diet with AFL, AGL