Verizon’s latest move to expand its fiber footprint includes a monumental $20 billion acquisition of Frontier Communications. Announced on September 5, 2024, this deal will widen Verizon’s fiber reach to 25 million premises across 31 states and Washington, D.C., adding 2.2 million Frontier customers to its base.
Hans Vestberg, Verizon’s CEO, highlighted the benefits of this strategic acquisition during a conference call. According to Vestberg, the acquisition supports four key areas: extending Verizon’s market reach, accelerating premium broadband and mobility services, diversifying their product offerings, and enhancing scale and distribution. Additionally, this deal aligns perfectly with Verizon’s strategy to grow connections and maximize customer relationships, while improving service revenue, EBITDA, and free cash flow.
“It will also power Verizon’s intelligent edge network for digital innovation like AI and IoT,” added Vestberg. With this acquisition, Verizon will become the only carrier with significant scale in both fiber and fixed wireless access, giving it a unique market position. The transaction is subject to Frontier shareholder approval and standard regulatory audits, with closure expected within 18 months.
The acquisition underscores Verizon’s commitment to providing comprehensive fiber and fixed wireless access solutions. Just a day before the deal went public, Sowmyanarayan Sampath, CEO of Verizon Consumer Group, spoke at the Bank of America conference on the strength of their 5G-backed fixed wireless access service. With almost 4 million subscribers, this service has already become a $2 billion revenue stream.
According to Sampath, the demand for home and mobility services has never been higher, and Verizon is well-positioned to meet this demand. The company holds a leading market share in both postpaid mobility and broadband. While their fixed wireless product boasts high customer satisfaction and increasing revenue, Verizon’s Fios fiber service continues to add between 400,000 and 500,000 new customers annually.
Highlighting the synergy between fiber and mobility, Sampath noted the significant reduction in churn when customers bundle services. Specifically, mobility churn is reduced by 50% and fiber churn by 40% when services are bundled. “With FWA, we see slightly lower numbers but a similar pattern,” he remarked. This convergence strategy not only increases revenue but also provides long-term value.
