Zayo report reveals soaring fibre demand driven by AI & cloud
Zayo has released its inaugural Bandwidth Report, highlighting a significant surge in bandwidth demand mainly driven by hyperscalers, carriers, and software and technology companies.
The study analyses trends from 2020 to 2024 and draws on both customer and third-party industry data. A key finding was that overall wavelength capacity purchased grew by 2.8 times over the four-year period, a development attributed largely to artificial intelligence (AI) training, inference, and evolving workloads. Purchases of metro dark fibre increased by 268% while long-haul dark fibre purchases rose 52.6% year-over-year between 2023 and 2024. In 2024, an unnamed data centre operator reportedly closed a deal for 6,912 fibre count, a massive 2,300% rise compared with the largest deal seen just four years before.
Zayo's third-party research estimates that nearly 200 million additional fibre miles will be required by the year 2030 to meet projected capacity needs and avert a potential bandwidth shortage. Of this, 120 million miles will be long-haul fibre and 70 million miles will be metro fibre.
Connectivity demand fuels growth
In its report, Zayo points toward increased connectivity demands from AI and digital transformation initiatives as influential factors. Between 2020 and 2024, hyperscalers and carriers accounted for 91.2% of all metro dark fibre purchases and 66.8% of all wavelength deals exceeding one terabyte of capacity with Zayo. The report finds these large-scale bandwidth purchases are mainly being driven by companies aiming to secure competitive advantage through emerging technologies.
"Increased connectivity demands from data centers, hyperscalers, and carriers are on track to create bandwidth scarcity in the near future. If you're not getting the bandwidth you need today, in 10 years it may be too late," explains Bill Long, Chief Product & Strategy Officer at Zayo. "Failure to address connectivity lags could lead to operational bottlenecks, resource shortages, and long-term competitive disadvantage."
Emerging markets and regional growth
The report identifies substantial growth in emerging data centre markets, with demand for long-haul and metro wavelength connectivity rising dramatically in non-traditional hubs. Memphis and Salt Lake City, for example, saw increases of 4,300% and 348.28% respectively in long-haul route and metro wavelength connectivity demand between 2023 and 2024. Zayo noted that these cities present optimal locations for fibre investment, providing low-cost energy and the capacity for new infrastructure builds.
Vertical sectors also showed major changes in usage. Manufacturing recorded an increase of 364.34% in wavelength capacity purchased between 2020 and 2024, rising from 1.88 terabytes to 8.71 terabytes. The software and technology sector experienced even more pronounced growth, purchasing 52.12 terabytes of wavelength capacity in 2024 compared to just 9.6 terabytes in 2020, an increase of 450%.
Remote access and satellite integration
Zayo's report noted that the combination of terrestrial networks and satellite providers is expanding coverage to previously underserved areas, supporting emergency communications and network resilience. The growing use of these integrated networks, particularly in support of Internet of Things (IoT) applications, is further contributing to overall bandwidth demand.
Seamless integration between terrestrial and satellite infrastructure is leading to increased resource needs, particularly as IoT adoption continues to extend into remote regions.
Fibre investment and company response
To address forecasted capacity gaps, Zayo has committed to developing additional fibre infrastructure, including the construction of over 5,000 new long-haul fibre route miles. The company has started work on a new 385-mile route linking Chicago and Columbus as part of this pledge. Additionally, Zayo announced plans to acquire Crown Castle's fibre solutions business, potentially adding 100,000 metro route miles to its network.
Bill Long commented on the importance of timely investment and the risks of not keeping pace with demand:
"Increased connectivity demands from data centers, hyperscalers, and carriers are on track to create bandwidth scarcity in the near future. If you're not getting the bandwidth you need today, in 10 years it may be too late," explains Bill Long, Chief Product & Strategy Officer at Zayo. "Failure to address connectivity lags could lead to operational bottlenecks, resource shortages, and long-term competitive disadvantage."
The Zayo Bandwidth Report concludes that ongoing investments in fibre infrastructure are essential to support expected growth in emerging technologies and the increasing needs of cloud, AI, and enterprise users across the sector.
