Zayo completes AboveNet acquisition, gains greater enterprise/wholesale balance

Zayo has put the finishing touches on its acquisition of AboveNet, a move that not only expands its network reach, but also gives it a more equal set of wholesale and business services.

With the AboveNet acquisition complete, Zayo instantly doubled its size with operations in 45 U.S. states and seven countries in North America and Europe.

From a network reach perspective, it will have a network that spans over 61,000 route miles with 4.6 million miles of fiber. Perhaps the more compelling aspect is that the newly combined network will serve about 9,000 locations, including a mix of major datacenters, telecommunications hubs, enterprise buildings and cellular towers.

Both companies bring complementary assets and network reach to the table.

In the New York City market, for example, Zayo had a growing presence via its acquisition of FiberNet, it was one of AboveNet's largest markets. Likewise, in Atlanta AboveNet had just recently begun building out its network presence, while Zayo already had a deep presence there.

"Our networks are very complementary," said Glenn Russo, EVP, Corporate Strategy & Development, Zayo Group, in an interview with FierceTelecom. "We are going to be selling the same sets of services across the broader footprint so we can offer our customers more comprehensive solutions."

The same thing goes for the service sets both service providers have.

While AboveNet initially had a strong focus on selling high bandwidth optical and Ethernet services to enterprise customers, Zayo's main focus was predominantly wholesale.

"Zayo was predominantly 80/20 carrier and AboveNet was predominantly enterprise, so if you put the two together you end up with a balance of 50/50 of carrier and enterprise-oriented businesses," Russo said.

Russo added that the merger of the two companies has two other potential benefits: wireless backhaul and business services.

Now, Zayo can extend its wholesale Fiber to the Tower (FTTT) services into AboveNet's markets. At the same time, Zayo can use its own existing fiber assets to better serve AboveNet's financial customers that need low latency fiber-based services, for example.

"Zayo has been very active in Fiber to the Tower whereas AboveNet had not been," he said. "Likewise, AboveNet was strong with large enterprise customers, particularly the financial vertical, so we can use Zayo's assets to help solve some of their problems as well."

In addition to Fiber to the Tower, the acquisition of AboveNet enables Zayo's colocation services subsidiary zColo to extend its services into AboveNet markets.

"AboveNet had colocation footprints in well connected buildings," Russo said. "We can now bring simple colocation products to the market and expanding our footprint, we can offer solutions in 20 markets now."  

AboveNet may be Zayo's largest acquisition to date, but the service provider isn't stopping there. In addition to AboveNet, it just announced a deal to acquire regional fiber provider FiberGate to expand its Washington, D.C. footprint.

For more:
- see the release

Special report: Wholesale provider leaders to watch in 2012

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