Verizon sees its growing fiber network as a multi-element platform that can not only reduce operational costs, but also give it a platform to support its current 4G and upcoming 5G network deployments.
In the near-term, the service provider’s replacement of copper can reduce maintenance costs.
Over the past three years, the service provider has continued to retire copper in various markets and replace the aging facilities with fiber.
“Fiber is going to be a critical asset for us,” Matt Ellis, CFO and SVP of Verizon during the fourth-quarter earnings call. “The thing it allows us to do is, and this is certainly in our footprint, is it allows us to replace the core copper networks that have served us well over the years, but from the capability and maintenance standpoint it makes a lot of sense to replace copper with fiber.”
An interesting side effect of the fiber expansion is that Verizon can use it to satisfy its current 4G and 5G wireless backhaul needs.
XO adds density
Verizon is bolstering its fiber network plans by acquiring XO Communications. After completing the XO deal in the first-quarter, Verizon will have a new set of fiber-based metro rings in the top 45 markets in the United States.
XO will also bolster its on-net fiber footprint, adding 4,000 buildings and 1.2 million fiber miles. XO’s intercity network also spans 20,000 route miles connecting 85 cities.
“As we densify 4G and think about 5G that explains why the XO acquisition was interesting to us to get those metro rings in 45 of the top 50 markets,” Ellis said.
Purchasing fiber assets from other providers is just one part of Verizon’s fiber network build out strategy. In cities like Boston, the service provider has built out a fiber network that can serve multiple purposes.
“The other thing you’re seeing us do in Boston is to look at this one fiber approach, which is building a network in a way that provides a common fiber infrastructure to serve a number of different needs,” Ellis said. “We can serve our consumers inside and out of the home and our small, medium and enterprise customers.”
While Ellis would not talk about any specific expansion plans, he said that Verizon will weigh its options to either build out its own fiber or purchase dark fiber from another provider.
“We look at ways for us to own the fiber, but if there are ways to partner with other people or build the fiber on our behalf we’ll do that as well,” Ellis said. “It’s a location-by-location, case-by-case basis and we look at the economics and we decided the best way to get to the fiber assets we need.”