EarthLink grows dark fiber

EarthLink Grows Dark Fiber

 

EarthLink struggled with wholesale business revenue in the first quarter, but it is finding growing interest in its dark fiber services.

Joe Eazor, CEO and president of EarthLink, said during the first-quarter earnings call that the company has been seeing growing interest in dark and lit fiber, particularly from enterprises and other carriers. “We’ve had some success commercially selling dark fiber routes and will continue to pursue those,” Eazor said.

Eazor added that it is seeing equal demand for both dark and lit fiber solutions from a mix of carriers on a route-by-route basis.

“We’re seeing good market traction for both dark and lit fiber services so people wanting to just buy transport services from us on the lit fiber side and enterprises and other companies looking to lease dark routes,” he said.

Complementing its dark fiber business services, the service provider introduced a new wholesale product in March that can deliver bandwidth increments of 500 Gbps, with the ability to scale up to multiple Terabits as demand dictates. The service provider has been touting this product to content provider customers that were requesting dark fiber solutions or an equivalent product.

Despite the gains it’s seeing in dark and lit fiber services, overall wholesale revenues declined 10 percent to $33 million. The company said that the decline includes a $0.8 million unfavorable settlement charge.

“The wholesale segment was negatively impacted by a settlement that was favorable to the company overall, but reduced wholesale revenue by $800,000,” said Louis Alterman, EVP and CFO of EarthLink. “These settlements happen from time to time and create some lumpiness in revenue.”

Alterman added that despite the first-quarter wholesale revenue decline, “we still continue to see very strong demand for transport services and our bookings were in the first quarter up by a little over 50 percent compared to our average quarterly bookings from last year.”

When asked about selling off network assets to other companies, Eazor said it is seeing interest in a mix of dark fiber and other solutions.

“In thinking about asset sales, it’s clear that there’s demand for a broader range of assets beyond just the dark fiber,” Eazor said. “We’re being good stewards of our assets in making sure whatever we do will maximize the value to the company, but beyond that I can’t comment further at this time.”

One of the best performing units for EarthLink was managed services, where revenues jumped 11 percent year-over-year to $52 million. The service provider said that it continues to see strong demand for managed network service products.

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