Verizon has already shored up a significant amount of fiber, but as the company moves forward with plans, fiber investments will be determined on a case-by-case basis, largely depending on geography.
Speaking at Bank of America Merrill Lynch Media Communications & Entertainment conference, Verizon EVP and CFO Matt Ellis says as Verizon adds fiber, “we can buy existing fiber, we can build fiber, or we can lease existing fiber.”
“I think it’s going to be geography by geography will determine what the best, most cost-effective approach will be to add the capacity that we can then generate revenue and returns off of,” Ellis comments.
Verizon has made a number of fiber deals this year as it moves to densify its cellular network. In February Verizon completed its $1.8 billion purchase of XO Communications’ fiber-optic network business, which helped the carrier secure metro fiber rings in 45 of the top U.S. markets. Then in August, the carrier announced its acquisition of 1,200 miles of WideOpenWest’s (WOW!) Chicago-area fiber network for $225 million.
The agreement also includes an additional $50 million in network investment for WOW! to finish the build-out of its Chicago network in the second half of 2018, according to Verizon.
“We’ve taken a look at different options,” Ellis says. “WOW! was a good asset that actually has a lot of the type of fiber that we’re looking for.”
The company is interested in substantial strand density as well. “In terms of the core part of that network in the city, you’re not talking about four to six strands,” Ellis comments. “You’re talking about something much more significant.”
Ellis pointed to discussions the company has had with Corning to build 1,700-strand fiber cables.
Verizon is not just looking to add network capacity for today, but “building a rich fiber network that will deliver multiple use cases in the future of that one asset and also prepare us with future technologies like 5G as well,” Ellis notes.
Also in the works are Verizon’s fixed wireless broadband trials in 11 markets, which Ellis confirmed the carrier still expects to take commercial during 2018.
An August report from SNS Research forecast service revenue from fixed wireless 5G subscriptions will hit $1 billion by the end of 2019, and climb to more than $40 billion by the end of 2025. The firm said the growth for 2019 will be driven largely by early commercial rollouts of the technology from Verizon and AT&T.
