By S. John Tilak
BANGALORE (Reuters) – AboveNet Inc (ABVT.N: Quote, Profile, Research), which operates fiber optic networks, is looking to expand into new regions in 2010, riding on faster-than-market growth and strength at its financial services segment.
The company is present in 15 U.S. metros and London and its customers are businesses that require high-bandwidth networks.
“Over the course of this coming year, I’m confident that you’ll see us announce our expansion into additional markets, both in the United States and on a global basis,” Chief Executive William LaPerch said in an interview with Reuters.
“Expansion to global cities is on the table,” he said. AboveNet expects the strength in financial services, which forms about 30 percent of its business, to continue.
“The finance segment is a strong segment for us and will continue to be strong on a going forward basis,” LaPerch said.
“In the fourth quarter, I started to see some customers that were planning for growth in 2010, be it in a very conservative way,” LaPerch said. He noted that this was different from a year ago, when customers were battening down the hatches. The company, which competes with AT&T (T.N: Quote, Profile, Research), Verizon Communications (VZ.N: Quote, Profile, Research) and Level 3 Communications (LVLT.O: Quote, Profile, Research), is counting on the continued rise of demand for bandwidth, which has been growing at 40 percent a year, he said.
The addressable market for AboveNet are those customers that have needs of 100 Meg (megabytes per second) and above. About 80 percent of all enterprise customers are expected to have that type of need by 2014, compared with 40 percent in 2009.
Founded as National Fiber Network Inc in 1993, its name was changed to Metromedia Fiber Network Inc in 1997. In 2001, the company faced liquidity issues, leading to its U.S. entities to file for bankruptcy protection in 2002.
In 2003, its parent company assumed its current name, AboveNet Inc, and emerged from bankruptcy. AboveNet went public last year. (Reporting by S. John Tilak in Bangalore; Editing by Jarshad Kakkrakandy)