Zayo Bets Big on San Diego

November 30th, 2011 by · 8 Comments

Zayo’s appetites get bigger every year, but yesterday’s expansion announcement may be its most aggressive organic buildout yet.  The fiber operator unveiled plans to build a metro network across the San Diego metro area, and we’re not talking about a starter ring or two here.  When complete, Zayo’s San Diego buildout will cover some 400 route miles.

The metro network will cover not only downtown San Diego, but will extend as far north as Oceanside and Escondido, and of course south along the border with Tijuana.  The map on the left is cribbed from Zayo’s fiber maps – pink representing planned routes.  When complete, Zayo will be leasing both lit capacity and dark fiber in the city, which has historically not had as many metro alternatives as the main internet hubs in and around Los Angeles and the San Francisco Bay Area.

Zayo has been expanding the Los Angeles footprint it picked up from Fibernet Telecom Group a couple years back, transforming it into a larger business as they have for so many of their other acquired assets. This buildout, however, doesn’t stem from any previous acquisition, although 360Networks does have a few route miles in the city that will contribute a bit when that deal finally closes.  But this is largely a greenfield entry for Zayo, an opportunity to build out some unique fiber assets in a fairly underserved major metro area.

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Categories: Metro fiber

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8 Comments So Far

  • Carlk says:

    So much for Metro Business Moats? What costs does Dan’s crew project for projects like this in very high rent districts? Will his capital intensity ratios hold up?

    Dan Caruso is a force to be reckoned with, it seems.

  • anonymous says:

    does zayo keep employees of its acquired companies

    • Interesting Note says:

      Not all stay, the “lucky ones” get a salary cut and watered down benefits. No stock options except for a few boys at the top …

    • Anonymous says:

      Having been among one of the acquired companies I’d have to agree with the first response except to say that in my case few were even offered an opportunity to stay and over time, particularly in sales, they were drummed out. Higher quotas, less accounts, smaller commissions.

  • Brent says:

    Obviously there is a reason for there to already be some of those lateral legs off the main loop and also a reason for some of the small loops (dual entrance into some key facilities?). They must already have some big clients lined up.

  • MT says:

    I tell you the person to be on the watch for is John Purcells at Fibertech. Smart man, ton’s of credibility with his investors and is making a strong impact on his ability to go after markets otherwise not on the radar of all these other fiber operators, take anchor customers and use their funding to build out his network, leverage the long term revenue commits for both enterprise and carrier customers to smooth out the otherwise bumpy road we call telecom and produce nice, measured, normalized and attractive growth. He’s doing all w/o a CMO, CTO, CIO and a quality sales leader. I’d love to see what he could do if he had a quality CMO, a industry vet for EVP of Sales and a technologist who could accelerate growth. Still hat’s off to him and his crew.

  • Dan Caruso says:

    I agree with MT that John Purcell is a great leader and a nice guy. As I tell John every time I see him, we have borrowed from his playbook as we have developed Zayo and I personally have learned a lot based on how he has run Fibertech. I disagree with MT’s other comments–John has a solid team around him… the great team is a reflection of John’s strong leadership.

    • MT says:

      @Dan – I believe the team John has is good, with quality folks. But John is the brain behind their execution. Without John the team would not have gotten FT to where they are.

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