Zayo Group says it's on track to reach 3M net installs by the end of 2016

Zayo Group continues to ramp up the number of net installs to its base of wireless, enterprise and carrier customers as demand grows for the service provider's dark and lit fiber services.  

Dan Caruso, CEO of Zayo, told investors during the company's fiscal third quarter earnings call that the provider expects new net installations to increase in the coming quarters, because as it sold more dark fiber and mobile infrastructure services.

Overall gross installs for the company's fiscal third quarter were $5.9 million and net installs were $2.1 million, driven by record low churn of percent.

"We do expect the quarter that we are in right now, through a combination of gross installs being around, or perhaps even in excess of, the $6.4, and the churn being about 1.1 percent, we do expect net installs to be a record number in the quarter we are in right now," Caruso said during the earnings call. "Perhaps somewhere in the 2.4, or north thereof level. The net installs imply a 7 percent annual recurring revenue growth rate."

In its dark fiber solutions segment, Zayo reported a total of $144.3 million in revenues with $115.2 million in dark fiber and $29.1 million of mobile infrastructure revenues.

Caruso said that what makes Zayo confident it can meet the 3 million net installation mark by the end of the year is the number of major network expansion projects it is involved in with its customers today.

"Right now we are spending capital and the revenue ramp is behind," Caruso said. "If you look out a couple, three quarters ... there is a catching up process that plays its way through. So a lot of the revenue that we sold and is waiting to be installed, a good chunk of it is waiting for those projects to get further along."

One of those projects is with a wireless operator customer in San Antonio. To complete this buildout, Zayo will extend its existing network in San Antonio and Austin by more than 700 miles to provide FTTT service to more than 300 towers. After completing this expansion, Zayo's FTTT network will include over 8,500 macro towers nationwide, including those under construction.

Zayo reported that consolidated third fiscal quarter revenue was $478 million, including $96.1 million from Zayo Canada following the close of its Allstream acquisition.

For more:
- see the earnings release
- see the earnings transcript

Special report: Verizon and Frontier begin new transitions: Tracking wireline telecom earnings in Q1 2016

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