Ziply raises $350 million to fuel fiber expansion

Ziply Fiber raked in $350 million in new funding from bond buyers this week, money CEO Harold Zeitz said will allow the operator to push beyond a previous target of delivering fiber to 80% of its footprint by 2024.

The operator was formed when Frontier Communications closed the $1.35 billion sale of its network assets in Washington, Oregon, Idaho and Montana to WaveDivision Capital and Searchlight Capital Partners in May 2020. At that time, fiber was available across only about 30% of Ziply’s footprint. In May of this year, the company outlined a plan to invest $500 million over the next three years to extend fiber to 80% of its territory.

Zeitz told Fierce that to date, Ziply has either completed or started deployments in a total of 52 markets. By the end of 2021, it expects to reach about 40% of its footprint with fiber. It is currently using GPON technology but plans to switch to and continue using XGS-PON “shortly,” Zeitz said.

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Thus far, the CEO noted its expansion is going to plan, adding the additional funding will allow it to continue building beyond the 80% mark. “We actually are right within line of what we expected in terms of our cost per location,” Zeitz said. “The rate at which we’re gaining customers and the fact that our costs are in line with what we expected are encouraging us to just try to do this perhaps a bit faster and also consider a broader area.”

In terms of how it’s choosing which markets to target, Zeitz explained it is focused on “making sure we’re spread out with our builds” so as not to overwhelm local officials with permitting requests and “sequencing” its work in the most efficient manner possible. He added “one thing we’ve found is there are towns who are so anxious to get upgraded to fiber that we get contacted by towns that want to make it easier and faster for us. And we do prioritize those.”

Zeitz declined to disclose Ziply’s subscriber figures. However, he noted that Ziply was able to take a business that had been shedding subscribers for several years and achieve subscriber growth “within one quarter” of assuming control. Since then, he said it has been growing subscribers “at an increasing rate” each quarter.

He also noted the company is working to revamp its enterprise business, which accounts for about half of its revenue currently.

“We’re engaging customers that maybe hadn’t been as communicated with in the past,” he said. It currently offers a range of services, including standard connectivity, dark fiber, wavelength, hosted voice and managed Wi-Fi. It plans to add an SD-WAN product for enterprise customers “soon,” Zeitz said.