As Zayo moves forward with its goal to reach $9 million in sales bookings for its current quarter, the service provider has found that E-Rate sales to school districts are becoming a key revenue source. In the first calendar quarter alone, Zayo said 20 school districts have already purchased services.
The service provider said that the contracts represent about double the E-Rate recurring revenue that Zayo was awarded during calendar year 2017.
It also demonstrates Zayo’s heightened focus on the public, health and utilities segment, which includes K-12 schools.
These E-Rate contracts include a range of dark fiber and lit fiber-based connectivity solutions to provide schools and libraries with high-speed connectivity. Interestingly, a number of these contracts leverage the existing Zayo network, much of which was deployed for wireless backhaul projects.
These projects also include network expansion, which in turn will be leveraged for other projects, including small cell deployments. Several schools are opting to buy Private Dedicated Networks (PDNs), which are fully managed solutions that include dark fiber, equipment and network operational support.
Two of Zayo’s largest E-Rate projects are ones it conducted for school districts in Texas and California. An education region in one of Texas’ major metro areas selected Zayo for a PDN and IP solution to connect 81 sites. The solution will leverage nearly 300 route miles of existing network and 85 route miles of planned fiber-to-the-tower (FTT) network. Zayo will also construct 580 route miles.
In a large city in California, Zayo will provide a school district with dark fiber to connect 28 sites, which will leverage 15 route miles of existing network and include 30 routes miles of new build.
“These E-Rate awards, coupled with the previously announced FTT contract and good overall sales performance, contributed to first calendar quarter net bookings that exceed our $8.5M goal by a healthy margin,” said Andrew Crouch, president and COO for Zayo, in a release.
Zayo noted that given the pace of the E-Rate award cycle, these awards represent most of the E-Rate bookings that Zayo is likely to be awarded in calendar year 2018. However, Zayo added that additional bookings are anticipated in the second calendar quarter. In 2017, most of the E-Rate awards took place in the second calendar quarter.