Holdings of the Zayo Group, Inc. With the extension of its fiber network infrastructure in the area, ZAYO recently increased network connectivity between Montreal, Quebec and Albany, New York. The switch would allow the company to provide high-quality infrastructure to help business and mobile carrier customers ‘ seamless transition to 5 G technology.
The network extension will add about 100 G ready new wavelength route miles to connect with one of the busiest cities in the United States to the largest city in Quebec, Canada. It is planned that the comprehensive wavelength network will support national business and business clients with dedicated bandwidth facility for data-intensive content, streaming services, and IoT applications. It is anticipated that the shorter and more direct path between two neighboring countries ‘ cities will be operational by January 2020.
Zayo is well equipped to take advantage of a diverse blue-chip customer base that includes the largest and most sophisticated bandwidth users. This aims to grow the business of the network at 5 percent and beyond while managing expenditures to improve the productivity of OpEx. In conjunction with new builds, such deals leverage their existing assets. These are likely to yield high free cash flow yields and reasonable returns on capital invested.
Significantly, Zayo’s portfolio of multi-site data centers, the ability to customize its solutions, and the ability to connect across its network globally are key drivers of growth.
Management is optimistic about the prospects of Fiber Solutions, its largest business segment, as it is experiencing a very strong momentum in the transaction. We still remain intrigued by this Zacks Rank #3 (Hold) company’s inherent growth potential. The market has outpaced the industry over the last year with an average return of 51.6 percent compared to the latter’s 23.1 percent increase.