Verizon Makes Corning’s Day, Talks Mergers Too

April 19th, 2017 by · 4 Comments

The telecommunications giant Verizon had a bit of an interesting day yesterday.  Apparently there's going to be more fiber in their diet in the next few years, and perhaps some romance as well.

Verizon has agreed to buy a big pile of new fiberoptic cable from Corning over the next three years.  Under the terms of the deal, Verizon will buy as much as 20 million kilometers of fiber per year through 2020, with a minimum purchase commitment of $1.05B.  The fiber will be an important part of Verizon's nextgen wireless backhaul network as the company upgrades in preparation for the rollout of 5G.  It's a lot of fiber, but it's not quite as much as one might think by the numbers given - if that fiber were in 865-count cables (for example only), we'd be talking about 23,000km route miles of fiber or 14,500 route miles per year.

The vast majority of that new fiber is almost certainly going to go toward deepening the company's backhaul network, bringing more towers on net while adding vast amounts of small cells as well.  And it will likely be mostly within the company's existing fiber footprint, as opposed to building out in AT&T and CenturyLink territory to go it entirely alone.  Hence, alternative providers in those territories can expect Verizon to be an active buyer for wireless backhaul as well.  But then we knew that, as that business has been driving metro fiber deployment more than any other in recent years.

And then the more salacious came through an interview with CEO Lowell McAdam in which he floated some new merger possibilities that Verizon is open to:  Comcast, Disney, and CBS.  Now if politics weren't what they are today, the chances of a Verizon/Comcast merger passing regulatory muster would be somewhere between zero and no fricking way.  But this is 2017 so it's difficult to get one's mind around the likelihood before the president tweets about it.  Disney or CBS would seem more straightforward, paralleling the Comcast/NBC and AT&T/Time Warner deals more closely.  Verizon's moves into content have been more digital and advertising so far, buying AOL and Yahoo.  A move into more traditional media would be fascinating, but would still be in line with its peers' moves.

But when a CEO of a major company throws out names like this, the one thing we can be sure of is that there is no actual talking going on at the moment.  He's surely just floating some trial balloons and shaking things up.  I feel this is a bit of a feint, drawing some of the attention away from the company's fiber rollout plans.  Like FIOS, that's a project that's going to absorb a lot of resources, will surely take much longer than a normal media cycle, and isn't going to help the bottom line until 5G arrives in force, whenever that may be.

Categories: Fiber Networks · ILECs, PTTs · Mergers and Acquisitions · Wireless

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4 Comments So Far


  • Hi Rob – I know it was an estimate, but what’s the likelihood of the fiber having higher/lower strand count?

    • Anonymous says:

      Lowell said 1700-count in an interview about the deal. Just posturing?

    • Rob Powell says:

      Yeah I heard the 1700 mention too, but I doubt any such design would be one size fits all so I decided not to consider that an exclusive number. I’ve no idea what the real average fiber count will be.

  • b says:

    McAdam was specifically asked about Charter (which would be easier to swallow than a Comcast/NBC Universal). McAdam did his dance around it, but it did sound like at the right price, they would be open to it.

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