AboveNet Expanding Services at Data Centers

By David Gross

For years, facility-based CLECs have struggled to fill many of the optical links they've run to corporate office buildings.   With 5-10 tenants in some locations, it can be a struggle for a provider to generate enough revenue to get a good return on the capital invested in the fiber lateral that hits the building.    The data center has provided a great opportunity to overcome this challenge by offering so many corporate customers in one physical location.  And few providers have seized this opportunity as well as AboveNet has.   This is one factor behind the company's 16% net margins - actual profit, not EBITDA.    This is the highest I've ever seen for a bandwidth provider.

Earlier this week, AboveNet announced a new sales initiative to provide optical connectivity services at over 400 data centers across the country.   Its footprint follows many of the major public data center markets, including DC, New York, and Silicon Valley.   A more detailed map of the company's data center POPs is available here.