Zayo Selected for Longhaul Dark Fiber

On Friday, Zayo revealed a new customer win for longhaul dark fiber.  An unnamed ‘major U.S. carrier’ has tapped them for a 20 year fiber IRU worth $50M spanning some 3,200 route miles through nine markets and eight states.  

The dark fiber in question is partly on Zayo’s existing longhaul dark fiber footprint and partly on the new routes the company has been constructing over the past year and a half.  In 2015, Zayo announced intercity buildouts on routes between Dallas and Omaha, Dallas and Phoenix, Salt Lake City and Sacramento, and Atlanta and Ashburn.   Over the years, they have acquired a substantial amount of longhaul dark fiber (the latest coming on the Chicago-Minneapolis route from Allstream, but the footprint was disconnected at that layer.  They still have a few routes they are likely to want to fill in if they can line up an anchor customer or two.  This deal, however, will generate its cash flow by selling on existing routes without needing much additional capex.

As for who the unnamed major U.S. carrier might be, it seems likely to be one whose fiber infrastructure isn’t yet fully national but who has been investing in new longhaul infrastructure and lighting it with new gear within its existing footprint.  Windstream fits that bill pretty nicely, actually, with plenty of use for dark fiber in the west where a nine-market, eight-state dark fiber loop is just about right (TX, CO, WY, UT, NV, CA, AZ, NM).  Windstream spun off its own fiber to CS&L via a triple-net lease, but there’s no reason they couldn’t be leasing fiber from Zayo outside that footprint.

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Categories: Fiber Networks · ILECs, PTTs · Internet Backbones