Cogent has converted 55 former Sprint technical sites into Edge data centers.

T-Mobile sold its Wireline business to Cogent for just $1 in September 2022. Much of the business sold 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.

Cogent’s acquisition included hundreds of technical buildings and switch sites previously used for Sprint’s wireline business – and Cogent has since set about converting the largest 48 in colocation data centers. Repurposing these facilities included removing unused, obsolete equipment and racks, and upgrading or installing new HVAC systems, UPS, backup generators, and fire suppression systems, as well as other structural changes.

In its Q4 2024 earnings report and call, Cogent detailed the latest update on the repurposing program. As well as upping the total number of converted Sprint sites to Cogent data centers to 52, the company has added 55 Edge data centers to its portfolio.

The sites, converted from some of the smaller Sprint locations, total 20MW across 108,800 sq ft (10,105 sqm). During the earnings call, Cogent CEO Dave Schaeffer said the new Edge sites “typically support about 40 racks” with around 350kW of power.

The newly-announced Edge sites are in addition to the 104 ‘core’ Cogent data centers currently totaling around 177MW across 1.9 million sq ft (176,515 sqm).

In total, Cogent’s data center footprint now totals 159 sites and 197MW. Most of these sites are in the US, but the company has a small number of facilities in Europe.

Offers coming for Cogent's data center footprint

After originally only looking to offer colo space at each site, Cogent has since pivoted to also offering 23 of the 52 former Sprint properties on a wholesale basis.

The company is exploring both acquisitions of sites with Cogent leasing some space back, or leasing sites on a wholesale basis. Three facilities have been fully converted, and 20 are in the process of completing their conversion. All 23 facilities are set to be fully take-over ready by the end of Q2.

Schaeffer said the company is currently in discussions with “multiple counterparties for multiple sites” and will hopefully be in a position to announce something in the coming months. He noted that from the letters of intent (LOI), the balance seems to be around 60:40 in favor of lease-type agreements – and Cogent has had “several offers” for the entire portfolio.

At least six have been put up for sale publicly. The facilities – spanning Florida, Texas, Maryland, Ohio, Missouri, and Georgia – range from 38,650 sq ft (3,590 sqm) up to 110,740 sq ft (10,300 sqm), offering capacities from 5MW to 14MW.

“We have been marketing these facilities in kind of collecting offers and letters of intent, as well as doing incremental tours,” Schaeffer said. “We believe that probably in the next six to eight weeks, we will be far enough along that it will make sense for us to do some calls for offers and kind of flush out how many of the LOIs are in fact serious and are ready to transact and at what economics.”

Schaffer also noted that the original plan for the non-Edge Sprint sites was to occupy around 10,000 sq ft and 1MW of capacity. But in some places, the company has been “reluctant” to put retail space in case companies want to take the whole facility and require Cogent to exit its retail footprint at those locations.

“It didn't make sense to put someone in that 10,000 feet that was taking two or three cabinets and that could be an impediment two or three months from now when someone comes on and says I want to take the whole facility,” Schaeffer said.

Schaeffer also noted the introduction of the new Edge sites has driven down the utilization rate of its retail colo business.

“We brought a lot of supply on and haven't sold it,” he said. “We are probably a couple of years away from getting back to 30 percent occupancy.”

“Now hopefully, the inference phase and the geographic ubiquity of our footprint changes that and accelerates that. But today, we don't have a lot of data around AI Edge cases as a significant driver of colocation. Our retail colo business has been aimed mostly at small corporates and I think that's at least where we're focused today. That may change as some of the AI inference models evolve.”

Cogent’s total revenue for Q4 2024 was $252.3 million, and $1 billion for the full year 2024. Adjusted EBITDA for the quarter was $66.9 million for the quarter, and $348.4 million for the full year 2024 – a decrease on 2023’s $352.5 million.

Cogent’s capex was $46.1 million for the quarter. That was down 22.2 percent from Q3; Cogent’s capex for the full year was $195 million.

Cogent CFO Thaddeus G. Weed said the data center conversion program has been accelerated and expanded, and will drive similar capital spending through the first half of 2025 and then “tail off.”

The company is in the process of decommissioning some legacy Cogent data centers and leased facilities, where they are redundant with the owned Sprint facilities.

Cogent currently leases a total of approximately 1 million square feet of space for data centers, offices, and operations centers.

DCD sat down with Cogent CEO Dave Schaeffer to discuss the company’s repurposing of legacy Sprint switch sites in the next issue of DCD>Magazine. Register for free today.