Lumos sees dark fiber dollars in wireless small cells, enterprise customers

Lumos Networks' current dark fiber revenues may still be relatively small at $1 million, but the telco cites growing interest from wireless operators and enterprise customers as factors that will drive up revenues in the coming year.

In May, the service provider began offering a dark fiber product in May. The dark fiber service will serve as a complementary element to its Project ARK fiber-to-the-cell (FTTC) program

Tim Biltz, CEO of Lumos Networks, said in an interview with FierceTelecom that given its size, dark fiber won't be as big a business as seen at other providers like Zayo, but it will be a growing segment for its wholesale business.

"...when we launched our initiative we were very underweighted to our dark fiber as part of our revenue stream," Biltz said. "We only do about $1 million in dark fiber revenue out of our guide of $115 million in our fiber business, but we think that grow substantially over time."

Biltz added that "I don't know if we'll ever get to the levels of Zayo and others, but if it became a $10 million revenue source that would be a ten-fold increase in the next five years, which would be significant."

One area where Biltz is confident that dark fiber is going to be a good fit is in small cell backhaul. In particular, wireless operators' interest dark fiber is rising as they move to deploy Cloud RAN (C-RAN) technology as a part of their small cell strategies.

The C-RAN concept separates the radio and antenna parts from the digital baseband path and pools multiple baseband units (BBUs) in a central office, or base station hotel. These digital-only base stations are linked via fiber to remote radio heads (RRHs).

Having an abundance of dark fiber will come in handy for fronthaul services. Fronthaul connects RRHs to the aggregated BBUs, with traffic then backhauled from the BBUs to the IP core or evolved packet core (EPC).

"Some of our customers want dark fiber for the macro site, but the real growth in dark fiber will be in as each of the carriers develop a small cell strategy and a front haul, whether that's a fronthaul C-RAN strategy," Biltz said. "I had a CTO of a wireless carrier in the past month say we weren't even talking about C-RAN, but today we're ready to commit to it and to do C-RAN thoroughly and getting those small cells back to the macro site we think dark fiber will be an integral part of that."

But wireless backhaul is only one area where dark fiber will have a fit for Lumos.

Biltz said that dark fiber is already a large part of the solution set it provides its growing set of enterprise services customers.  

"Wireless backhaul is a focused strategy for those customers, but we look at dark fiber as a solution," Biltz said. "A lot of our dark fiber revenues comes from enterprises that, as part of a large WAN, need dedicated or dark fiber to connect one facility to another."

Fiber expansion continues to be a factor, a trend that was seen during the second quarter 2015.

During that period, Lumos added 145 route miles of fiber in the quarter, all of which are company-owned, ending the quarter with 8,100 total route miles. It also added 44 enterprise lit buildings in the quarter and 97 in the first half of 2015, up over 70 percent from the second half of 2014.

Related articles:
Lumos CEO: We expect our backhaul revenue stream to be TDM-free in 2016
Lumos Networks starts pre-selling services on its new 75-mile fiber route in Virginia
Verizon's small cell moves could provide backhaul bounty for Cincinnati Bell, FairPoint and Lumos
Lumos expects small cell, dark fiber RFPs to heat up, says Biltz
Lumos sees growth in wireless backhaul, data initiatives, but 2014 revenue drops to $202M

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