Zayo Group has signed up 12 new follow-on customers for its Sacramento-to-Salt Lake City route that it began building in early 2015 after securing an anchor tenant customer, bringing it one step closer to meeting its net install goals for the year.
Being able to complete this and other fiber routes on time and scale the customer base quickly will help Zayo complete 3 million net installs by the end of 2016.
Since starting the build out of this route last year, Zayo completed the 970-mile route in the fourth quarter of 2015 at about 25 percent under the budget it allocated for the network segment.
The follow-on sales are to three long haul dark fiber and nine optical wavelength customers, including a mix of large carriers, internet and content companies. Zayo said that the combined sales in aggregate are generating a strong return, with a cash flow yield of approximately 29 percent.
Serving as a complement to Zayo’s existing long haul network, the Sacramento-to-Salt Lake City route enables diverse connectivity for enterprise, carrier, cable and content companies between major West Coast data center markets such as Los Angeles, Seattle and the San Francisco Bay Area to the rest of the country.
While Zayo won’t release its fiscal fourth quarter 2016 earnings until Thursday, the service provider reported in the previous quarter that 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.
Zayo has continued to find luck in constructing regional networks that address new customer opportunities in specific markets. In December 2015, Zayo conducted a similar build out between Omaha and Dallas, where it added a 1,000-mile intercity dark fiber route, passing through Tulsa and Kansas City.
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