Zayo divests Minnesota local exchange carrier for $42m

10 August 2018 | Natalie Bannerman

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Zayo Group has completed the sale of the Scott-Rice Telephone Company, a Minnesota incumbent local exchange carrier for $42 million.

The company was sold to Nuvera, formerly New Ulm Telecom, after Zayo acquired it in 2017 as part of its purchase of Electric Lightwave. Since then it has been managed separately but still kept within Zayo’s Allstream business segment.

“The completion of this sale is an important step toward the separation of the Allstream assets,” said Matt Steinfort (pictured), CFO of Zayo. “It better positions us to focus and execute on our core communications infrastructure business.”

Scott-Rice Telephone serves residential and business customers in areas of Scott and Rice counties SouthWest of Minneapolis.

In addition, Zayo recently confirmed the completion of its long haul dark fibre route between Los Angeles and Dallas. The route adds to Zayo’s existing long haul network, enabling diverse connectivity between major west coast data centre markets to Dallas.

“Zayo is committed to success-based investments in our network, and this expansion will help meet the high-bandwidth demands across many industries,” said Jack Waters, CTO and president of fibre solutions at Zayo. “We continue to collaborate with key customers and construct critical strategic routes to ensure the availability of high-performance fibre and infrastructure.”

Development of the 2000-mile route began in 2015 after Zayo managed to secure an anchor tenant for the project. The build-out included both upgrades and new construction, and Zayo has managed to secure additional dark fibre and wavelengths anchor tenants on the route, supporting return on investment.

Zayo will now offer its full suite of connectivity solutions across the route, enabling 100G wavelengths service towards the end of this month. The new wavelengths will use a diverse route from other carrier networks and from Zayo’s existing routes and will enable unique options between Los Angeles, San Diego, Phoenix, Tucson, El Paso, Ft. Worth and Dallas.