Fiber-to-the-tower expansion supports carrier move toward network densification

Fiber, backhaul and infrastructure services provider Zayo Group this week announced it has sold fiber-to-the-tower services applicable to 800 macro and small cell sites in the past 18 months.

The company estimates the services will yield a more than 20% return on a $23 million incremental investment. Zayo reps said that macro and small cells sales have increased by more than 50% compared to the same period in 2014.

Matt Erickson, president and COO of Zayo’s physical infrastructure segment, said the sales spikes is being driven not just by carriers, but by clients in other verticals as well.

“Follow-on sales to both mobile carriers and a wide range of other customers are leveraging the fiber we are building to support FTT deployments,” Erickson explained. “School districts, health care providers and technology companies use the fiber to interconnect their key locations and to connect to their remote cloud and data center environments.”

This expansion apparently has a long runway as the company pointed to research from SNL Kagan that projects the number of macro sites in the U.S. will increase by 25% over the next five years.

“Based on the economics of FTT deployments, and the accelerating demand for macro towers and small cells, we will continue to pursue our strategy of seeking anchor tenants and making capital investments in wireless infrastructure,” Erickson said.

Zayo completed an initial public offering in October. The previously venture-backed firm saw stock value increase 17% on the first day of trading; Zayo offered 24 million shares of common stock.

Since then the company has undertaken a number of expansion initiatives including a $675 million data center deal. In that case, Zayo bought competitor Latisys Holdings, which operated eight domestic data centers comprising 185,000 square feet and producing 33 megawatts of power. That purchase bolstered Zayo’s portfolio to 45 facilities in the U.S., France and the United Kingdom.

The Latisys deal, as well as other merger/acquisition activity, also upped Zayo’s cloud portfolio, while the company further invested in fiber-to-the-tower announcing plans to hook up 500 Seattle-area towers.

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Via RCR Wireless