Verizon's Shammo: Our Boston FiOS build was driven by LTE needs

Verizon's (NYSE: VZ) recent announcement to bring FiOS to Boston -- one of the cities that was initially left out of its initial build target -- was driven by a desire to fulfill its wireless LTE and business service desires, its top financial executive said.

Speaking to investors during the MoffettNathanson Media and Communications Summit 2016, Fran Shammo, EVP and CFO of Verizon said that what makes Boston a viable FTTH target is that Verizon can use the fiber to satisfy multiple consumer and business purposes.

The investment could also leverage the existing network infrastructure such as ducts and central offices (COs) it already has in place.

"When we looked at Boston, LTE needed to be densified so wireless was going to run the fiber regardless," Shammo said. "When we looked at running the fiber for wireless, we said, well that will enhance what we can do from an enterprise perspective and by the way it's only $300 million more over the next six years to actually deploy fiber to the home from that same fiber."

However, this process does not work as well in other cities where Verizon does not have the same wireline infrastructure to support a FTTH build.

"When you go into cities like Chicago outside the footprint and others, wireless is already densifying with a lot of fiber and small cell," Shammo said. "It won't make sense for us to go deploy fiber to the home in those because we don't have the backhaul infrastructure from a wireline infrastructure to handle FiOS."

Shammo said that the wireless business will leverage a mix of "fiber, the old MCI network, cable companies or wherever they can get that backhaul from microwave and other sources."

But now that it has set plans in motion to bring FiOS to Boston, will Verizon adopt a similar model in other cities within its wireline footprint?

Shammo said that he would not completely rule out such a scenario, but did not offer any specific plans.  

"I get the question, 'well would you expand FiOS more,'" Shammo said. "When I think about cities like Baltimore or Alexandria, Virginia, could that same model work? The answer is 'probably.'"

Shammo added that "at this point in time we're focused on Boston only because wireless was going to densify Boston for LTE and that's what made sense."

For more:
- hear the webcast (reg. req.)

Related articles:
Verizon to bring FiOS to Boston via $300M partnership with the city
Mass. mayors plead with Verizon to bring FiOS to their towns
Verizon faces pressure from unions to expand FiOS into new markets
Verizon's Frontier sale gives it a contiguous Northeast FiOS footprint, says Shammo

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