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US Dark Fiber Network Operators Industry Maintains Strong Growth

August 14, 2012

US Dark Fiber Network Operators Industry Maintains Strong Growth

By Ashok Bindra
TMCnet Contributor

Despite strong competition from wireless technologies, the dark fiber market continues to make progress. In fact, market data shows that the US dark fiber network operators industry has maintained strong growth due to growing broadband use. The expanding broadband connections will continue to support revenue growth in the next five years, according to market research firm IBISWorld.

The IBISWorld study forecasts that the US dark fiber network operators market will increase at a compound annual growth rate (CAGR) of 5.3 percent over the next five years, to reach a market value of $1.3 billion by 2017. Over the five years to 2012, the report estimated that the US dark fiber network operators market would achieve revenue growth at an average annual rate of 3.7 percent to reach $986.2 million.

IBISWorld expects revenue to continue on its upward trajectory during 2012, growing by 7.7 percent. The combination of increased broadband connections and rebounding corporate profit has supported strong revenue growth during the past five years. Industry profit has also grown, from 9.3 percent of revenue in 2007 to an expected 10.8 percent in 2012.

The report identifies key US players. These include companies such as AboveNet, a provider of high bandwidth connectivity solutions for business and carriers, Quanta Services, a leading provider of specialized contracting services, delivering solutions for the electric power, natural gas and pipeline and telecommunication industries, and Zayo, a provider of fiber bandwidth infrastructure solutions and carrier neutral collocation.

The report indicates that AboveNet was acquired by Zayo in July,  6th 2012. With this acquisition, Zayo instantly doubled its size with operations in 45 U.S. states and seven countries in North America and Europe.

The number of participating firms in the industry is expected to decline at an average annual rate of 2.4 percent between 2007 and 2012, to a total of 165, with employment at a level of 1,836 workers. The research data suggests that this trend is likely to continue over the five years to 2017, though at a less pronounced average of 0.9 percent per year.

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Edited by Brooke Neuman
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