Zayo has expanded its fiber-to-the-tower (FTTT) footprint in Atlanta to accommodate an unnamed Tier 1 wireless operator that awarded the company a new wireless backhaul contract.
For this build, Zayo will extend its existing 1,320-mile route mile network by more than 1,000 miles to provide FTTT service to over 500 towers.
Based solely on the initial anchor sale, the underlying wireless customer sale has a contract term of 20 years and is expected to generate an initial unlevered cash flow yield of approximately 4 percent per annum on $92.5 million of expected net capital investment.
When it completes this network expansion, Zayo's FTTT network will include over 8,500 towers nationwide, including those under construction.
The service provider reported in the third quarter that wireless backhaul deals continue to be a a key contributor to its Physical Infrastructure revenue mix.
During the quarter, Zayo reported $183.7 million in fiscal first-quarter Physical Infrastructure revenue, up year-over-year from $154 million, in the same period a year ago.
In addition to winning more FTTT deals, the service provider is making inroads into the burgeoning small cell market. It recently announced that now provides 1,200 small cell sites in its territory with a mix of fiber and turnkey network solutions.
While FTTT is the near-term opportunity, the service provider says it is just one part of a four phase backhaul market strategy that includes fiber-to-the-tower, dark fiber backhaul, small cells, and emerging C-RAN opportunities.
But wireless backhaul is only one element of the network build. The service provider said it will use the expanded Atlanta network to provide a mix of lit and dark fiber services to other enterprises and service provider customers along the route.
Atlanta is a prime location for a fiber expansion. The city has become a major gateway for a number of global businesses, while experiencing growth in technology, telecommunications, media, healthcare and IT. Zayo's fiber network expansion will enable it to respond to requests from businesses, school districts and other government entities in the broader metropolitan area for fiber-based services.
For more:
- see the release
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