Zayo's Seattle-area wireless backhaul deal gives it new enterprise, content provider opportunities

Zayo has secured a new agreement with an unnamed wireless carrier to provide fiber-to-the-tower (FTTT) service to 500 towers, a deal that will not only expand its wireless backhaul business, but also could be used to target new enterprise and content service opportunities.

Over 350 of the towers it secured contracts for will be located in the Greater Seattle area, with 90 percent as single tenant expansion sites.

This contract, which was closed in the June fiscal quarter, has a term of 20 years and is expected to generate an initial unlevered cash flow yield of approximately 11 percent per annum on $61 million of expected capital investment. The capital investment will primarily fund the construction of over 350 route miles of new fiber network.

Seattle is one of many markets where Zayo has won large FTTT contracts and is a large contributor to its overall wireless backhaul revenue mix.

In its fiscal third quarter, the service provider won a number of key wireless backhaul deals with major wireless operators, including projects in Dallas, Phoenix and Denver. During this period, the service provider reported that dark fiber made up 14 percent of its wireless backhaul mix.

When this expansion is complete, Zayo will have approximately 8,000 towers, including those under construction, connected to its fiber network.

While it could not reveal who the wireless operator is, this buildout will create additional fiber service opportunities. Zayo will use the network expansion to target universities, school districts, hospitals and content providers that need a mix of dark and lit fiber services.

For more:
- see the release

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Zayo says dark fiber makes up 14 percent of its wireless backhaul revenue mix

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