Zayo Group Holdings, Inc. has announced that it has sold dark fiber services on its Omaha to Dallas route, which is currently in development, to seven additional customers since the initial anchor customer sale in mid 2014. The fiber route will connect Omaha, Kansas City, Bentonville, Arkansas, Tulsa, and Dallas.
“Most of Zayo’s committed capital projects are tied to signed customer contracts with an associated positive return,” explained Ken desGarennes, CFO at Zayo. “With the Omaha to Dallas project, a portion of the capital was speculative in our view, meaning we needed follow-on sales to achieve a desired return profile.”
“These follow-on customer sales result in this strategic project achieving two key milestones — a positive unlevered return on the expected net capital investment and a cash flow yield of approximately 10%,” said Matt Erickson, Zayo’s Co-COO and president of Physical Infrastructure. “In addition, we have a robust funnel of additional sales opportunities on this unique route.”
The Omaha to Dallas route is scheduled to be completed in late 2016, ahead of the originally announced 2017 completion.
Zayo’s intercity dark fiber network, which includes approximately 15,000 route miles of owned network nationwide, addresses the requirements of enterprise, carrier, cable and content companies for scalable, high-capacity infrastructure. Zayo has announced additional intercity construction projects, including Sacramento to Salt Lake City, Washington D.C. to Atlanta and Phoenix to Dallas.