The rumor was true.
Verizon on Tuesday confirmed it will acquire 1,200 miles of WideOpenWest’s (WOW!) Chicago-area fiber network for $225 million as part of its continued efforts to prepare for 5G.
News of the deal first surfaced late last week in a report from Reuters.
Verizon said the deal will help it lock down fiber for 500 macro-cell sites and 500 small cell sites in the city, and help reduce leasing costs for macros and small cells already connected on WOW!’s network there. The transaction is expected to close in the first quarter of next year.
The purchase agreement also includes an additional $50 million in network investment for WOW! to complete the build-out of its Chicago network in second-half 2018, Verizon added.
Hans Vestberg, Verizon’s president of Network and Technology, called the purchase “ another example of Verizon’s commitment to invest in multi-use fiber to provide customers with next-generation broadband services, such as smart cities and 5G.” The acquisition will also help the carrier “create comprehensive digital solutions for small- and medium-business and enterprise customers,” he added.
The news comes on the heels of a $1.05 billion deal with fiber supplier Corning back in April, as well as deals with Prysmian and Straight Path. The former arrangement with Corning calls for Verizon to purchase up to 12.4 million miles of optical fiber each year starting in 2018 and running through 2020.
During Verizon’s earnings call last week, executives stressed the importance of fiberin the carrier’s small cell densification and spectrum expansion plans.
CFO Matt Ellis said fiber is a “critical element” to Verizon’s plans, noting multi-use fiber will provide a key backbone of support as the carrier works to roll out small cells and more spectrum for both 4G and 5G. According to Ellis, Verizon’s small cell builds are already underway in all of the top metro markets in the country.
It seems more fiber deals could be on the way as well as those buildouts continue. Ellis declined to give specifics, but did say fiber will be part of Verizon’s capital spending plan in 2018.
A roundup of analyst takes on Verizon’s fiber plans can be found here.