Fiber firm Cogent Communications has converted another nine Sprint switch sites to colocation data centers, and is exploring selling a large portion of its newly refurbished data center capacity on a wholesale basis.
T-Mobile sold its Wireline business to Cogent Communications for just $1 in September 2022. Much of the business sold to Cogent was Sprint‘s legacy US long-haul fiber network, which T-Mobile had acquired as part of its $26 billion merger with Sprint in 2020.
The deal included 19,000 long-haul route miles and 1,300 metro route miles of fiber, and a significant real estate footprint totaling 482 technical spaces and switch sites. More than 40 of those sites were data centers totaling some 400,000 sq ft (37,160 sqm) of space.
By August, Cogent said it aimed to invest some $50 million converting the largest 45 sites into colocation data centers. That planned footprint was set to total around 1.3 million sq ft (120,775 sqm) and 160MW, adding to the 55 colocation facilities and 77MW of capacity the company previously operated.
As part of its Q3 2024 quarterly results this month, the company provided another update on its ongoing efforts.
During its Q2 2024 earnings results in August, Cogent said it had added 31 data centers to its colocation portfolio over the year, taking the total from 55 to 86. This month, the company said it had added another nine over the most recent quarter, taking the total to 95 data centers.
In total, 43 of the 95 current Cogent colocation facilities are buildings acquired through the Sprint acquisition and converted into data centers. The converted sites comprise more than 1.8 million square feet of floor space and offer 169MW.
The company also noted it now aims to convert 48 Sprint sites, rather than the original 45. The company aims to have them all converted and fully operational and marketable by the end of Q2 2025. As well as offering retail colo services, the company then aims to lease or sell many of the sites to interested parties wholesale and retain a portion of the facilities for its own uses.
Interest from large players has also seen the company expand the scope of the project. During the company’s Q3 earnings call, CEO Dave Schaeffer said that as well as keeping some space and power to offer as retail colo, the company is also marketing the sites on a wholesale basis, either as a direct sale, or a long-term lease, and is currently in discussions with “multiple counterparties for multiple sites.”
“We have been conducting dozens of tours at dozens of locations with many counterparties. We have been getting significant feedback from those counterparties on what they want to see,” he said. “Now sometimes we accept it, sometimes we don't. But it has resulted in us accelerating our conversion of these facilities.”
“We were only intending to convert about 10,000 sq ft and about 1MW [or each site] into a retail Cogent data center and the remaining space and power was going to sit fallow,” Shaeffer added.
“As the acceleration of AI training caused an acute shortage of data center power, we realized we had an incremental opportunity to monetize that excess power and space. We were not initially planning to even monetize this part of our acquired assets.”
He said that 21 of the 48 total sites that the firm is converting to data centers have been deemed suitable for wholesale monetization, totaling 88MW out of the 169MW.
Shaeffer also noted that Cogent was also decommissioning some legacy Cogent leased data center facilities that are redundant with its fee simple-owned Sprint facilities. A former Cogent facility in Herndon, Virginia, was recently put up for sale, but it's unclear when the company exited the site.
