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CTC Communications Invests $18 Million in Local Fiber, Enhancing Network Capabilities and EBITDA

Strategic Insights

— 2 min read

CTC Communications Group Inc., a rapidly growing integrated communications carrier, has announced a significant investment of $18 million in local fiber to enhance its network capabilities and drive business growth. As part of this initiative, the company will purchase and "light up" local fiber in selected geographical areas of eastern Massachusetts, southern New Hampshire, southern Maine, and Rhode Island, connecting its Network Points of Presence (POPs) to Verizon local exchange offices with fully redundant, high-capacity fiber.

This investment is expected to reduce operating costs, improve on-net provisioning intervals, and eliminate the need for leased inter-office facilities from Verizon, resulting in significant financial and operational benefits. The company estimates that this initiative will provide an estimated quarterly on-net operating expense savings of over $1.8 million and improve its EBITDA performance by $1.5 million in CY2001. Furthermore, the local fiber build-out will enable CTC to move existing PowerPath(SM) customers to its owned fiber at the Verizon local switching office, reducing dependency on Verizon inter-office facility availability and strengthening the company's focus on profitability.

Key Takeaways:

  • CTC Communications Group Inc. has invested $18 million in local fiber to enhance its network capabilities and drive business growth.
  • The company will purchase and "light up" local fiber in selected geographical areas of eastern Massachusetts, southern New Hampshire, southern Maine, and Rhode Island, connecting its Network Points of Presence (POPs) to Verizon local exchange offices with fully redundant, high-capacity fiber.
  • The investment is expected to reduce operating costs, improve on-net provisioning intervals, and eliminate the need for leased inter-office facilities from Verizon.
  • CTC estimates that this initiative will provide an estimated quarterly on-net operating expense savings of over $1.8 million and improve its EBITDA performance by $1.5 million in CY2001.
  • The company will fund this local fiber build-out internally, with a "capital lease" type of payment schedule allowing for significant cash flow benefits.
  • The initiative is expected to result in a rapid payback and will enhance CTC's fully funded business plan, reducing dependency on Verizon facilities and improving speed to market with new products and applications.

Statistics:

  • $18 million: The amount invested in local fiber by CTC Communications Group Inc.
  • 65%: The proportion of existing on-net customers that will use the new local fiber.
  • 2001: The year in which the first phase of the local fiber build-out will be completed, with the final phase completing in September.
  • 28: The number of Verizon local switching offices that will be directly connected to CTC's Network.
  • $1.8 million: The estimated quarterly on-net operating expense savings resulting from the initiative.
  • $1.5 million: The improvement in EBITDA performance in CY2001 resulting from the initiative.

Sources:

  • Business Wire, "CTC Communications Group Inc. to Invest $18 Million in Local Fiber" (December 19, 2000)
  • CTC Communications Group Inc. press release, "CTC Communications Group Inc. to Invest $18 Million in Local Fiber" (December 19, 2000)

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