Verizon's McAdam: We are talking to other cities about FiOS deployments

Verizon (NYSE: VZ) changed its FiOS buildout tune in April when it announced it would bring FiOS to Boston via a $300 million, six-year investment plan. Now, the telco is indicating other cities could be in line for a similar build.

Lowell McAdam, Verizon


For the Boston FiOS deployment, Verizon will create a single fiber-based network that will serve multiple purposes, including delivering FTTP services to consumers and businesses, smart city applications as well as serving as a backhaul mechanism for its upcoming 5G services.

CEO Lowell McAdam told investors during the telco's second quarter earnings call that the "one fiber" strategy in Boston could be replicated in other cities.

"We will create a single fiber optic platform that is capable of supporting wireless and wireline technologies and multiple products," McAdam said. "In particular, we believe the fiber deployment will create economic growth for Boston and we are talking to other cities about similar partnerships."

However, McAdam added that when it talks to other communities about potential FiOS builds, the service provider would be looking at similar mixed use networks.

"No longer are the discussions solely about local franchise rights, but how to make forward-looking cities more productive and effective," McAdam.

Complementing the Boston FiOS and other potential builds is its pending acquisition of XO Communications' fiber assets. Upon completing that purchase, Verizon will have an even deeper fiber footprint with an expanded network to increase its Ethernet penetration while satisfying its small cell and wireless backhaul needs.  

XO currently operates metro networks in 40 major U.S. markets with over 4,000 on-net buildings and 1.2 million fiber miles. The service provider's intercity network also spans 20,000 route miles connecting 85 cities.

"Our announced agreement to XO will be a key part of this strategy, providing us with the deep fiber assets including 40 major fiber rings and millimeter wave spectrum that will give us a critical competitive edge," McAdam said.

While Verizon may be bullish about a multi-faceted FiOS strategy, the sale of more of its wireline assets to Frontier in April means that service provider's wireline footprint is now relegated to the East Coast corridor.

However, McAdam said that there's nothing stopping the telco from conducting similar builds in other cities, including those outside of its wireline footprint.  

"On the cities, there's no boundary with our wireline footprint," McAdam said. "Obviously, we have a stronger position in the Washington to Boston corridor and move to market more quickly, but we don't view that as a barrier at all and we are talking to other cities."

For more:
- see the earnings release
- listen to the webcast (reg. req.)

Special report: Tracking wireline telecom earnings in Q2 2016

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