FiberNet Adds Chicago, Miami

Defying the tsunami of economic fear out there, FiberNet Telecom Group (FTGX) has brought metro networks online in two brand new markets: Chicago and Miami.  This is a significant milestone for the company, before now they had focused nearly all their effort on NYC with a small extension in Los Angeles, they have doubled their markets!  It seems clear after this initiative that they have bigger plans and I will need to rethink their place in the food chain.

How will they get away with such aggression in dangerous times? Well, FiberNet can expand like this for two reasons. Firstly, they are cashflow positive, growing at near 20% annually, and don’t have any maturities coming up – their performance lately has been a model of consistency, including their Q3 earnings a couple weeks ago. And secondly, because it doesn’t cost much to lease fiber rings between major datacenters in these two cities because there is sufficient competition. That same competition might make this expansion seem less exciting, but they are used to competing in the NYC market, so that sort of competition is something they are used to I guess.

Quite a journey for a company that partly originated in the Native American crafts business.  I have to say though, it takes guts to do anything but hide money under the mattress these days, so I wish them luck.

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Categories: Datacenter · Metro fiber