Winstar Tuesday signed a $300 million deal with Metromedia Fiber Network to buy dark fiber capacity in 38 states across the United States and three European markets.
WinStar will pay Metromedia (MFNX) the sum over the next 20 years.
The company expects the fiber purchase to expand its local and global presence with the addition of both metropolitan ring capacity and fiber-lit buildings. The move will also reduce WinStar’s cost of revenue.
Domestic markets in the deal include Boston, Atlanta, Los Angeles, Seattle and Houston. The company’s fiber purchases will cover 50 of the 60 domestic markets which WinStar intends to connect to its network.
London, Amsterdam and Cologne as the metropolitan centers for the European network. WinStar (WCII) currently holds licensed to provide services in these cities. Metromedia will also offer WinStar the dark fiber on its German ring as part of the deal.
Metromedia will add fiber to designated buildings in each market, opening the door for WinStar to expand into broadband connectivity in the future.
“As we integrate this fiber capacity into our network, it will replace high-cost leased facilities and dramatically expand our ability to provide end-to-end broadband services for our customers,” said William
J. Rouhana, Jr., WinStar’s chairman and CEO.
For its own network, Metromedia Tuesday added six cities — Denver, Miami, Phoenix, Detroit, Cleveland and St. Louis — to its infrastructure as part of a planned U.S. intra-city network expansion to 25 markets. Together with its 15 planned expansions in Europe, the new market additions is expected to total 40 infrastructure builds. The Miami hub is also expected to develop a link which Metromedia will use to enter Latin America.
In April, WinStar launched a global Internet roaming service to provide its dial-up customers with worldwide access to the Internet via local connections in more than 140 countries.