In a bid to strengthen its global reach by expanding its fiber footprint, Zayo Group Holdings, Inc. ZAYO recently announced that it is extending its fiber networks across four European markets. Notably, the company is working on broadening its network base in Paris, London, Dublin as well as Amsterdam. Significantly, these moves will enable the company to deliver high-capacity fiber at major technology and commerce centers.

In London, the company is stretching out its new fiber route from Hatfield, Hertfordshire to Stratford, East London. The extension will allow the company to cater its current as well as prospective customers’ requirements with high-performance fiber. This will also offer an additional option to long-haul routes from Dublin to Amsterdam. Also, in Paris, the company is making efforts to widen its fiber footprint in La Defense, a key business district located to the west of the city boundary of Paris. In fact, this will enable Zayo to grow its reach to key office buildings in the district where it already serves dozens of customers.

This apart, in Dublin, Zayo was selected by a multinational company for a complete diverse dark fiber ring around the metro area. Notably, the company’s high-fiber count solution will help improve its latency for the customer. Moreover, the route will support the company’s current T50 fiber network in the area. Further, in Amsterdam, the company’s expansion work and upgrade of its fiber network lie between Schiphol-Rijk and the Amsterdam Science Park.

Notably, these networks are connected to the company's pan-European and global fiber net including nine data centers throughout Western European.

Our Take

Zayo remains enthusiastic about the prospects of its largest business segment, Fiber Solutions, as it is witnessing a very strong momentum. For instance, during the fourth quarter of fiscal 2018, the segment performed exceedingly well owing to both organic and acquisition-related growth. Notably, in the reported quarter, the segment posted a record gross install of $3.0 million.

Moreover, the company has been experiencing broad-based demand across all customer verticals, which is likely to sustain going forward. Zayo remains bullish about additional E-Rate opportunities in the upcoming quarters and is well-poised to benefit from the growing need for cloud adoption and high-performance bandwidth worldwide.

However, strong competition from several market players including Bandwidth Inc. BAND, CommScope Holding Company, Inc. COMM and ADTRAN, Inc. ADTN pose a threat to Zayo's profitability.

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