Lumos Networks (Nasdaq: LMOS) has put its "edging out" network expansion strategy into action by hatching plans to build 100G optical wavelength routes connecting Richmond to Ashburn and Lynchburg in Virginia.
Over a 92-mile metro fiber ring connecting Richmond to other key parts of Lumos' existing markets, the telco will offer its entire repertoire of Ethernet, IP and wavelength services to large business parks, data centers, and carrier PoPs (points of presence).
These new routes will enable the telco to accommodate two needs: handle bandwidth growth and address its carrier and enterprise customer's requirements for lower latency and route diversity in key verticals such as healthcare, education, financial and wireless backhaul.
This is not just a show and tell network, however.
During the Q1 earnings call, Lumos said it signed contracts with two core enterprises and three service provider customers in Richmond as part of its "edge-out" fiber network strategy. It added that the Richmond market will "go live" in Q3 2013.
While Lumos still operates a rural ILEC business, it has been continually expanding its presence in the IP and fiber-based business services and wholesale segments, particularly in Virginia.
These investments have enabled it to become a Tier 2 threat to incumbent business service providers such as Verizon (NYSE: VZ) and Cox Business. The new network routes will also enable Lumos to better compete with Lightower, which deepened its presence in Virginia by completing its purchase of Sidera last month. Before being acquired, Sidera was in the process of building a new 1,000 route mile network that is scheduled to be completed by the end of the year.
Evidence of Lumos' business services efforts was once again on display in its Q1 earnings report as strategic data revenue rose to $29.7 million. Within the strategic data segment, enterprise and carrier data rose sequentially to $9.9 million and $14.9 million, respectively, while IP services rose to $4.7 million.
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