FiberLight, Zayo Help CBeyond Take the Fiber Plunge

cbey has been transforming itself away from its T1 origins for a while now, but today they announced a major new initiative to reach their customers via fiber alternatives. They hope to light 1,000 buildings and bring Metro Ethernet to 50% of their cstomer base by the end of next year. Two companies that feature here regularly will be providing much of the dark fiber to get there: Zayo and FiberLight. 

CBeyond has signed formal agreements with both FiberLight and Zayo for dark fiber across the company’s footprint. In Zayo’s case, there is a commitment for fiber to 600 buildings, presumably FiberLight is picking up a substantial piece of the other 400 although the details weren’t given. That’s not a minor buildout, they’ve clearly taken the fiber plunge as part of their realignment. Until now, most of their efforts to convert to Ethernet have been via Ethernet-over-Copper.

CBeyond also reported earnings today of course, checking in with revenues of $123.8M, EBITDA of $23.0M, and a net loss of $1.2M. That is higher than expected on the top line, and a bit lower than expected on the bottom line.  But overall it was nothing out of the usual way and the company reaffirmed guidance.  The only difference was that their capex guidance has been clarified to include only ‘cash capex’, meaning not the non-cash portion that relates to long term dark fiber commitments like those announced today.

The other part of CBeyond’s realignment is of course its cloud services, which generated $4.0M in revenue during the first quarter or 3% of the company’s revenues. That’s still a small number, but we’re still at an early stage of the cloud-powered CLEC revolution in the industry as a whole. I wonder if CBeyond will get some more credit for its plans once they have 1,000+ fiber-lit buildings to go with it?

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Categories: CLEC · Cloud Computing · Financials · Metro fiber