Zayo's Atlanta data center expansion driven by content provider customer win

Zayo is making a large expansion to its zColo Atlanta data center at 1100 White Street SW in order to accommodate a new unnamed content provider customer.

Set to be completed in the second quarter, the expansion will enable Zayo to accommodate new sales with an additional 11,000 square feet of space. The site also has a large set of interconnection paths with other data center facilities in the Atlanta area.

Atlanta has been a key growth market for Zayo. Since it purchased the Atlanta data center in July 2014, the service provider said it has "experienced continued growth momentum in both cloud and colocation services to a wide range of industries, including healthcare, cloud, and technology."

From a financial point of view, Zayo said that revenue and EBITDA in the Atlanta facility have risen by 60 percent or more. After completing the expansion, Zayo expects to recognize a 30 percent or higher unlevered return on its investment.

Content owners are becoming a growing factor of Zayo's customer mix. In December 2015, the service provider won a dark fiber anchor contract with an unnamed large content provider along its planned Phoenix to Dallas fiber route.

A FierceTelecom reader suggested that the content owner that purchased dark fiber along the Phoenix to Dallas fiber route is Google (NASDAQ: GOOG), because the route resides close to where the Internet search giant is deploying FTTH services around Phoenix and Dallas. However, Zayo would not comment on the deal.

Serving content and business customers is only one function of the data center. It also serves as an anchor facility for Zayo's 2,300 route miles of fiber it has already built or is building in the Atlanta area.

Besides offering Zayo's full suite of hybrid cloud infrastructure solutions, it also provides high-bandwidth interconnections to 56 Marietta and other major carrier hotels.

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