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Columbia Business Monthly

Fiber Ambitions: Merger of Spirit and Lumos May Boost Investment in S.C.

Jul 05, 2018 12:14PM ● By Kathleen Maris
By David Dykes

Now that Spirit Communications of Columbia and Lumos Networks, a regional provider of fiber-bandwidth in the mid-Atlantic and Southeast, have combined, questions have turned to what it will mean for Spirit’s South Carolina operations and employees.

Company officials don’t hesitate to answer. They say Spirit’s operations and personnel should benefit since the combined company’s intent is to expand its existing fiber network. And they say the state as a whole should see an economic boost since an expanded network should attract new businesses.

Dan Watts, vice president of product and business development for the combined company, compares Spirit to an infrastructure operation much like a power company.

“If they’re delivering electricity to the end users, we’re delivering high-speed connectivity in a secure private network that has access to all of this high-end technology and the solutions and services that we provide on that fiber network,” he says.

Those highly technical services should attract more businesses to relocate, start up, and grow in the region, he says. “We’re bringing the infrastructure and the solution-and-services set to the market that businesses need to function and grow.”

He adds, “We’re going to continue to invest in South Carolina and Columbia like we always have.”

Grey Humphrey, the combined company’s chief revenue officer, says Spirit has had 180 people in Columbia, including sales, accounting, human resources, engineering, network operations, project managers, and marketing. 

Over time, the combined company could add more people locally, he says. He declined to disclose a breakdown of revenues by products or services. 

All of Spirit’s hosted products in Columbia are cloud services, which the company has been doing for years, Humphrey says.

“But we’re certainly expanding that,” he says. “We’re certainly excited about infrastructure as a service and disaster recovery as a service that we’re rolling out.” 

The combination of Spirit and Lumos created a fiber network stretching from Pittsburgh to Atlanta, with the vast majority of revenue and fiber network concentrated in the high-growth markets of South Carolina, North Carolina, and Virginia. 

Together, Spirit and Lumos will operate a network of approximately 21,000 fiber route miles and well over one million total fiber strand miles. The combined business will have more than 9,000 on-net locations, comprised of approximately 4,500 on-net enterprise locations and more than 4,500 unique contracted fiber to the cell (“FTTC”) locations.

The new entity offers a full range of Ethernet, MPLS, dark fiber, advanced voice, and cloud services to thousands of carrier, enterprise, data center, and government customers. The entity also connects 44 data centers, including Lumos-owned sites and Spirit facilities.

The two companies announced in May that Express Cloud Access service was available across Spirit’s footprint in South Carolina, North Carolina, and Georgia. 

Express Cloud provides direct access to multiple cloud service providers, or CSPs. The service was launched on Lumos’s Mid-Atlantic network in 2016 and now operates across the combined company’s nine-state footprint.

Express Cloud Access allows a customer to bypass the public Internet and connect to a CSP directly. With Express Cloud Access, the CSP becomes a virtual endpoint on the customer’s wide area network.

A 2017 MacAfee report on the state of cloud adoption and security found that 93 percent of businesses are using cloud services and cloud spending is expected to consume 80 percent of all IT budgets by 2019. 

“These trends underscore the importance of carrier-class network access to CSPs. Without it, cloud services may not have acceptable response times, which can negatively affect a business,” Watts says. “If a company doesn’t use the public Internet for their corporate WAN, why would they rely on it for connectivity to a key CSP? Express Cloud Access helps maximize the performance of cloud resources. The bigger a company’s investment in the cloud, the more important this performance becomes.”

Lumos and Spirit announced in April the EQT Infrastructure III fund had completed its majority stake investment in Spirit. With the transaction complete, Spirit combined with Lumos, which EQT acquired last year.

Timothy G. Biltz, president and CEO of Lumos, is CEO of the combined company. Robert Keane, president and CEO of Spirit prior to the combination, and Brian Singleton, CEO of TruVista and chairman of the Spirit board of directors prior to the combination, are on the combined company’s board of directors.

“In an industry where most combinations are focused on eliminating cost benefits, this business combination is born out of expectations for revenue growth,” Keane says. “We now have twice the footprint to reach more of our customers’ locations, and we expect to utilize both companies’ product portfolios to cross-sell these services across the expansive combined enterprise base.”
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