Verizon has embarked on a three-part strategy of leasing, acquiring and building out their own fiber routes, but the service provider says that building its own fiber is the best way to align new networks with its wireless and business services strategy.
In less than a year, the service provider not only purchased XO Communications and some of WOW!’s Chicago fiber assets, but also signed purchase agreements with Corning to deploy 12.5 million miles of fiber.
The service provider also has a purchase order with second supplier Prysmian.
Lowell McAdam, CEO and Chairman of Verizon, told investors during its fourth-quarter earnings call that the service provider sees the build of its own fiber as the best approach to address current 4G—and future 5G—and business services needs in its markets.
“With our fiber expansion process it all boils down to whether it is organic or is it M&A?,” McAdam said. “XO and Wide Open West had fiber we got by M&A, but we also announced our deal with Corning, which is a multi-year deal where we doing 12.5 million fiber per year for the next three years. That would tell you we’re tilting towards organic.”
While it will look at the needs of each market, the key goal for Verizon is how it can forgo leasing fiber from other providers to simultaneously support its growing wireless and business wireline units.
“Our priority is what can we do to get off other leased services to meet our 4G cell densification needs, then 5G and our enterprise custoemrs,” McAdam said. “We’re out in markets placing fiber now so it’s a market by market analysis.”
Verizon is working with leaders in the cities where it has plans to build out fiber to secure necessary rights of way and streamlined permitting processes.
“The meetings that we’re having with the cities and what access they will give us to street furniture and conduit factor into the equation,” McAdam said. “It’s a bit fluid at this point.”
Still, Verizon will not rule out further fiber acquisitions if they are a good match with its mission and architecture.
“I wouldn’t tell you if an opportunity to accelerate it through M&A we would do it, but most of the fiber companies were built for different purposes,” McAdam said. “These networks were built for point to point enterprise services and don’t fit the architecture that we’re building today, which is multi-use fiber for our intelligent edge network.”