Verizon says that when it completes its purchase of XO Communications, the service provider will not only have a larger swath of wireless spectrum, but also a fiber network that can satisfy its wireline and wireless needs.
John Stratton, EVP and president of operations for Verizon, told investors during the Wells Fargo Securities Technology, Media and Telecom event that its fiber assets remain important to both its wireless and wireline businesses particularly in cities like Boston.
“The fact is both the spectrum and the fiber assets are very interesting, and the fact is we love what the spectrum will allow us to do in the context of 5G,” Stratton said. “If you think about Verizon and what we used to call Verizon Business and the metro and long haul assets we have, it’s a nice complement.”
By including the pending acquisition of XO Communications into its fiber fold, Verizon will have a fiber footprint in 45 of the top 50 U.S. cities.
Verizon said it chose to expand in Boston because of the opportunity to leverage its fiber footprint to support its wireless densification efforts.
“As we think about the marriage of wireless densification and the fiber that supports it, it’s a big deal,” Stratton said. “We’re doing some things now in a very concentrated way to really lever up those assets meaningfully.”
In April, Verizon broke its moratorium on new FiOS builds by establishing an agreement with Boston via a $300 million, six-year investment plan that will replace the city's aging copper network infrastructure with fiber.
As part of its build-out strategy, Verizon will install the fiber throughout the city on a neighborhood basis.
Under this plan, Verizon will start replacing copper with fiber in Dorchester, West Roxbury and the Dudley Square neighborhood. Later deployments will take place Hyde Park, Mattapan, and other areas of Roxbury and Jamaica Plain.
Through the partnership with Boston and the resulting fiber build to attach small cells on city street lights and utility poles, Verizon will improve its 4G LTE wireless service.
“With our work in Boston, one of the obvious things we have an opportunity to do now is leverage that as a common asset across all lines of the business,” Stratton said. “It’s funny when we talk about this, we go and do the design work and say what would the infrastructure need to be if I was supporting with a common fiber plant my wireless needs for densification, the FiOS business, and supporting enterprise customers.”
Stopping short of naming another city where it would have a mixed case use for its fiber to satisfy FiOS and wireless networks, Stratton said that the one fiber strategy does have merit.
“We never built FiOS in Boston because when we looked at it we said it’s alright, but from a standpoint of a return profile it was a bit marginal. But when I layer in the capital leverage that we achieve by blending the uses of that common plant it changes the outlook,” Stratton said. “As I think about where I am deploying that wireless network, what else I can do with that fiber is a big deal.”
But even as Verizon moves forward with its FiOS and 5G plans in Boston, a growing base of communities continue to ask for the service and it’s unclear if the telco will ever respond.
Previously, 13 city mayors on the East Coast called on Verizon to expand its FiOS FTTH network into more areas that have limited access to high-speed services.