Uniti Announces New Long-Haul Fiber Contract Award with Large Hyperscaler

Rhea-AI Summary

Uniti Group (Nasdaq: UNIT) has secured a new 20-year long-haul fiber and conduit contract with an existing strategic hyperscale customer. The project involves constructing over 130 route miles of new multi-conduit systems and high-strand count fiber cables, connecting Montgomery, AL to Cuba, AL.

The infrastructure will link key data center locations and provide a diverse path to other north-south, long-haul routes, terminating just east of Meridian, MS. The contract, executed in Q4 2024, is scheduled for delivery in 2026. This development reflects growing demand from hyperscale customers seeking multiple fiber paths for network redundancy in strategic data center locations.

Positive

• Secured long-term 20-year contract with existing hyperscale customer
• Expanding infrastructure with 130+ route miles of new fiber network
• Strategic expansion connecting key data center locations
• Strengthening presence in enterprise markets

Negative

• Project completion not until 2026, indicating delayed revenue recognition
• Significant construction costs expected for new infrastructure development

Insights

Infrastructure Investment Analyst

This 20-year long-haul fiber contract represents a strategic infrastructure expansion that strengthens Uniti's position in the hyperscale market. The 130-mile multi-conduit system connecting Montgomery to Cuba, AL creates a valuable east-west corridor that complements existing north-south routes. For context, hyperscalers typically pay $200-400 per fiber mile per month for dark fiber IRUs, potentially generating $5-10 million in annual recurring revenue from this route alone.

The project's value extends beyond direct revenue - it creates a strategic infrastructure asset that can serve multiple hyperscalers seeking network diversity. With data center operators increasingly requiring 3-4 diverse paths, this positions Uniti to capture additional contracts along this route. The 20-year term provides excellent revenue visibility and the multi-conduit design allows for future capacity expansion without additional construction costs.

In simple terms: Think of this like building a new highway between two cities - once it's built, multiple companies will pay to use it and the builder collects tolls for decades. The more companies need to travel between these cities, the more valuable the highway becomes.

Data Center Market Analyst

The strategic placement of this fiber route reveals important shifts in data center deployment patterns. Connecting Montgomery to areas near Meridian suggests hyperscalers are expanding their edge presence in smaller markets, likely driven by latency requirements and disaster recovery needs. This follows the trend of major cloud providers establishing regional hubs in tier-2 markets to improve service delivery.

The multi-path redundancy requirement (3-4 diverse routes) indicates mission-critical workloads are being distributed across these locations. For perspective, this level of redundancy is typically reserved for facilities handling financial transactions or critical cloud services. The investment signals confidence in sustained data center growth in these markets.

Simply put: Big tech companies are building digital warehouses in smaller cities to serve customers better. They need multiple backup paths to keep services running 24/7, just like a hospital needs backup generators. This new fiber route helps ensure their services stay online even if other connections fail.

LITTLE ROCK, Ark., Jan. 21, 2025 (GLOBE NEWSWIRE) -- Uniti Group Inc. (“Uniti”) (Nasdaq: UNIT) is pleased to announce a new 20-year long-haul fiber and conduit contract award from an existing strategic hyperscale customer that will connect Montgomery, AL, one of Uniti’s existing 30+ enterprise markets, to Cuba, AL. As part of this contract award, Uniti will construct over 130 route miles of new multi-conduit systems and high-strand count fiber cables.

The new east-west infrastructure will connect key data center locations and provide a diverse path to other north-south, long-haul routes. This new route will end just east of Meridian, MS, another one of Uniti’s existing enterprise markets.

“Uniti’s momentum within the hyperscale space continues and is evidence of the strong demand for our customized infrastructure solutions,” commented Greg Ortyl, Uniti’s President of Wholesale & Strategic Accounts. “We continue to see our hyperscale customers seeking three, four or, sometimes more, fiber paths into strategic data center locations to provide the network redundancy they demand, and we are excited to participate in future solutions that are also strategic for Uniti.”

This contract award was executed in the fourth quarter of 2024 and Uniti plans to deliver these fiber routes to its customer in 2026.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended from time to time. Those forward-looking statements include all statements that are not historical statements of fact, including those regarding our expectations relating to the hyperscaler space.

Words such as "anticipate(s)," "expect(s)," "intend(s)," “plan(s),” “believe(s)," "may," "will," "would," "could," "should," "seek(s)" and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to the Company’s and Windstream’s ability to consummate our merger with Windstream on the expected terms or according to the anticipated timeline, the risk that our merger agreement with Windstream (the “Merger Agreement”) may be modified or terminated, that the conditions to our merger with Windstream may not be satisfied or the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, the effect of the announcement of our merger with Windstream on relationships with our customers, suppliers, vendors, employees and other stakeholders, our ability to attract employees and our operating results and the operating results of Windstream, the risk that the restrictive covenants in the Merger Agreement applicable to us and our business may limit our ability to take certain actions that would otherwise be necessary or advisable, the diversion of management’s time on issues related to our merger with Windstream, the risk that we fail to fully realize the potential benefits, tax benefits, expected synergies, efficiencies and cost savings from our merger with Windstream within the expected time period (if all all), legal proceedings that may be instituted against Uniti or Windstream following announcement of the merger, if the merger is completed, the risk associated with Windstream’s business, adverse impacts of inflation and higher interest rates on our employees, our business, the business of our customers and other business partners and the global financial markets, the ability and willingness of our customers to meet and/or perform their obligations under any contractual arrangements entered into with us, including master lease arrangements, the ability and willingness of our customers to renew their leases with us upon their expiration, our ability to reach agreement on the price of such renewal or ability to obtain a satisfactory renewal rent from an independent appraisal, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, the availability of and our ability to identify suitable acquisition opportunities and our ability to acquire and lease the respective properties on favorable terms or operate and integrate the acquired businesses, or to integrate our business with Windstream’s as a result of the merger, our ability to generate sufficient cash flows to service our outstanding indebtedness and fund our capital funding commitments, our ability to access debt and equity capital markets, the impact on our business or the business of our customers as a result of credit rating downgrades and fluctuating interest rates, our ability to retain our key management personnel, changes in the U.S. tax law and other federal, state or local laws, whether or not specific to real estate investment trusts, covenants in our debt agreements that may limit our operational flexibility, the possibility that we may experience equipment failures, natural disasters, cyber-attacks or terrorist attacks for which our insurance may not provide adequate coverage, the risk that we fail to fully realize the potential benefits of or have difficulty in integrating the companies we acquire, other risks inherent in the communications industry and in the ownership of communications distribution systems, including potential liability relating to environmental matters and illiquidity of real estate investments; and additional factors described in our reports filed with the U.S. Securities and Exchange Commission.

Uniti expressly disclaims any obligation to release publicly any updates or revisions to any of the forward-looking statements set forth in this press release to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

ABOUT UNITI

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure and is a leading provider of fiber and other wireless solutions for the communications industry. As of September 30, 2024, Uniti owns approximately 144,000 fiber route miles, 8.7 million fiber strand miles, and other communications real estate throughout the United States. Additional information about Uniti can be found on its website at www.uniti.com.

SALES CONTACTS:

Ron Mudry, 727-421-0388
Senior Vice President, Chief Revenue Officer
ron.mudry@uniti.com

Greg Ortyl, 314-749-2478
President, Wholesale & Strategic Accounts
greg.ortyl@uniti.com

INVESTOR and MEDIA CONTACTS:

Paul Bullington, 251-662-1512
Senior Vice President, Chief Financial Officer & Treasurer
paul.bullington@uniti.com

Bill DiTullio, 501-850-0872
Senior Vice President, Investor Relations & Treasury
bill.ditullio@uniti.com

This press release was published by a CLEAR® Verified individual.

FAQ

What is the scope of Uniti's (UNIT) new fiber contract announced in January 2025?

The contract involves building 130+ route miles of multi-conduit systems and fiber cables connecting Montgomery, AL to Cuba, AL, with a 20-year term.

When will Uniti (UNIT) complete the new fiber route construction announced in 2025?

Uniti plans to deliver the fiber routes to its customer in 2026.

Which markets will Uniti's (UNIT) new fiber infrastructure connect?

The infrastructure will connect Montgomery, AL to Cuba, AL, ending just east of Meridian, MS, connecting key data center locations.

When was Uniti's (UNIT) new hyperscaler contract executed?

The contract was executed in the fourth quarter of 2024.

What is the duration of Uniti's (UNIT) new fiber contract with the hyperscaler?

The contract has a 20-year term.