Verizon signs $300M optical cable purchase with Prysmian

fiber (pixabay)
To support the Verizon purchase request, Prysmian said it will make a significant investment through 2018 in its United States-based optical cable unit.

Verizon named Prysmian as an additional supplier of fiber cable to support its 4G and 5G wireless and wireline broadband plans, signing a $300 million deal with the company.

Under the terms of the three-year contract, Prysmian will supply Verizon with over 17 million kilometers (10.6 million miles) of ribbon and loose tube cables.

This is the second major optical cable and component deal Verizon has signed. In April, Verizon signed a $1.1 billion, three-year fiber and hardware purchase agreement with Corning. Verizon will purchase up to 20 million km (12.4 million miles) of optical fiber each year from 2018 through 2020.  

RELATED: Verizon signs $1.1B fiber purchase agreement with Corning, supports wireline, wireless broadband initiatives

To support the Verizon purchase request, Prysmian said it will make a significant investment through 2018 in its United States-based optical cable unit. Prysmian already has three telecom production sites in the U.S., two for the production of optical cable and one for optical fiber.

Prysmian Group's telecom division has qualified as an optical fiber, optical cable and connectivity solutions provider to Verizon for more than a decade.

"Prysmian Group's telecom division is an established optical cable and connectivity solutions provider to Verizon,” said Viju Menon, chief supply chain officer for Verizon, in a release. “This strategic supply agreement helps ensure we can ramp supply in order to expand our network capacity and speed 5G deployment."

One of the interesting aspects of the Prysmian Group and Verizon supply deal involves diversity partnerships to include social and sustainability imperatives. A percentage of business will flow through material management services offered by third party handlers that are owned and operated by certified woman business owned enterprises.

Similar to the Corning agreement, Verizon’s pact with Prysmian could translate into further business for network construction company Dycom.

Dycom reported in its fiscal year 2017 earnings report an increase in revenues from Verizon. The company has already signed a number of contracts with the telco in recent years, including construction, maintenance and engineering contracts covering states in Massachusetts, New York, New Jersey, Pennsylvania and Maryland.

“Given its close relationship with VZ over the years (including working on VZ’s initial FiOS deployments), we would expect DY will capture some of this incremental VZ business,” said Jennifer Fritzsche, senior analyst for Wells Fargo, in a research note.