Connecting the Dots: 2019 Mid-Year Check-in

In early January I penned a blog which included a few predictions for the year. Now that we are a few days into July and halfway through 2019, I think it’s a good time revisit those predictions and see how things are coming along.

Prediction #1

Everstream makes an acquisition or two

In April, Everstream announced that it had acquired Arch Fiber Networks. Everstream gains a 75-mile conduit system, with 55 route miles of fiber already in the ground, as well as two duct crossings that run underneath the Mississippi River St. and East St. Louis. In total, 32 buildings are fiber-ready and 39 are considered on-net-ready with conduit fed to the site. Read More

Prediction #2

Frontier Communications files for bankruptcy

Frontier has not filed for bankruptcy (yet), but it continues to struggle to turn things around, though it is making an effort.

  • In January, Frontier offloaded ~100 Wireless Towers to Everest Infrastructure Partners for $80 million Read More

  • In January, Frontier launched Frontier Connect - Cloud, leveraging the Equinix ECX platform and ecosystem. Read More

  • In May, Frontier sold operations and assets in Washington, Oregon, Idaho, and Montana to WaveDivision Capital, in partnership with Searchlight Capital Partners, for $1.352 billion

  • In Early June, Frontier added three new directors to its Board, and lost two. Read More

Frontier has a lot of debt. The overall business is moving in a downward trajectory with consistent customer churn, and insignificant revenue movement. While Chapter 11 might be looming, it’s not a sure thing.

Good Luck to Frontier on turning things around.

Prediction #3

Internet Exchange Points continue to further evolve into interconnection platforms

The internet is transforming, and whether or not you agree, IXP’s need to embrace the change and adopt new strategies to ensure they can continue to grow and stay relevant.

In the past I have mentioned that DE-CIX is well along in the process of their transformation, and this can be seen in the language used in marketing collateral. Take a look at the DE-CIX Service World, and you’ll see it’s not just about peering anymore.

LINX, one of the largest internet exchange points in the world, and highly governed by its members has even made mention of potential product enhancements in its 2018 Annual Report.

“The NCA platform saw us fully automate the fulfillment needs in delivering member services to LON1. It also gave us the core system to extend automation to other vendor equipment such as the new IP Infusion network operating system (NOS) software at the heart of LON2. The validation of this full end-to-end automation is also a key enabler for when we add additional overlay services in the future, such as IXP reseller services, private VLAN connectivity and the wider marketplace services we are considering.”

I love the idea of a Marketplace within internet exchange points. The technology foundation is ideal to give members (customers) the ability to participate in a two-sided marketplace where they can not only peer across an internet exchange service, but also sell network services to marketplace participants.

Prediction #4

Marketing dollars continue to be burned by “Edge” companies

This wasn’t really a fair prediction as it is more an obvious one given that companies trying to crack a new market or bring awareness to a new technology or product will need to spend a lot of time and money on marketing.

But with “Edge” focused conferences in both Aspen and Monaco, I’d say this is still holding true.

Prediction #5

Crown Castle acquires metro and regional fiber assets

Crown has been fairly quiet this year. During the time when there were questions about who might acquire Zayo, Crown did mention that they would likely not be interested in acquiring another large asset, and would much rather prefer to look at complementary tuck-in acquisitions in markets where there is an opportunity to densify their fiber footprint, or fill gaps.

I’m holding to this prediction and I believe there will be at least one, if not two acquisitions made by crown this year.

Prediction #6

Rural activity will ramp up

Giants like Microsoft, Facebook, and Google are also making investments, focused on connectivity, mostly in rural or underserved areas of the world.

A number of companies are working on new satellite initiatives, such as OneWeb, SpaceX, and Amazon.

I believe we’re seeing positive momentum in rural areas thanks to government funding, spectrum auctions, and advances in wireless technologies.

Prediction #7

PE acquires Zayo, Company Splits. EnterpriseCo is sold to GTT, and Zayo re-enters the public market as a REIT with InfraCo in 2020

The big kahuna. In May, a group including Digital Colony, EQT, and FMR (Fidelity) acquired Zayo. The deal is not expected to close until early 2020, so we have quite a wait to see what happens.

As far as the other parts of this prediction? I’m not so sure anymore, however, I don’t expect the new Zayo to be held together as it is today, and we should expect a spin-off, at least with the data center business.

Score: 4/7

Lets see if i can break 80% and see two more of these predictions come true.