Zayo's Waters: 'This is the time' to leverage network densification

cell towers
Zayo CTO Jack Waters described the industry as being in the "second or third inning" of the network game.

As Zayo pursues new lit and dark fiber opportunities with wireless operators, the service provider will continually look for ways to leverage and extend its existing fiber networks to meet customer needs.

Jack Waters, CTO of Zayo, told investors at the recent Barclays Global Technology, Media & Telecommunications Conference that it is building platforms to satisfy wireless operators’ current 4G and future 5G network deployments.  

“You need to have two goals: take advantage of the second or third inning of the game which is small cell and perhaps even 5G, and then our job is to harvest and leverage the assets in the ground,” Waters said. “You have to do both because this is the time to take advantage of densification and to take on what are bigger projects that help us build out a platform that allow us to harvest for years and years to come.”

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By building out high-count fiber in the markets where it is winning fiber to the tower or small cell backhaul deals, Zayo will have a platform from which it can attract not only second wireless tenants, but also other local businesses.

IHS forecasts that the worldwide small cell market will move past $2 billion by 2019 as long as service providers continue to announce deployment plans.

In order to get returns on its fiber investments for small cell and macro tower deals, Waters said that Zayo will need to attract additional wireless carrier tenants as well as looking for opportunities to sell a mix of dark fiber and lit optical wavelength services.

“We talk a lot about dark fiber, but the fact is our lit services represent 45% of the company’s revenue,” Waters said. “Using that as the fiber footprint as the canvas, our job is to paint on top and leverage that for our lit services and that’s how we need to think about our opportunity.”

Zayo is making good on multitasking its fiber networks in two markets: Denver and North Central Texas.

In Denver, Zayo will connect 153 schools and sites, including two DPS data centers.

Similar to other E-Rate builds, Zayo said that 562 miles of the network is already in place or under construction, with 56 miles still to be built for one of its wireless operator customers.

“More and more,  Denver is a great example where we had various providers join in our buildout,” Waters said. “We had the Denver Public School System and that’s another layer on top and all of the lit services that come on top of that infrastructure.”

Similarly, in North-Central Texas, the service provider is extending services to schools located in the Texas Education Service Center Region 11 via a fiber network build that's under construction in Dallas-Fort Worth for a major wireless operator. This 1,178-mile platform consists of 440 miles of a previously planned fiber-to-the-tower (FTTT) build, 443 miles of existing network, and 295 miles of new construction. 

Waters said that the timing of getting revenue on these multisite projects varies.

“Some of these projects are longer in nature to implement so you don’t really get the revenue from that second or third tenant until you’re a long way through the implementation of these projects,” Waters said.