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Will Verizon (VZ) Pursue More Fiber-Optic Deals in 2017?
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U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) is on track to strengthen its foothold in the fiber space. The company’s recent XO Communications buyout approval from the U.S. telecom regulator, Federal Communications Commission (FCC), plans to strengthen fiber-optic operations in Boston along with small cell densification and expansion of dark fiber footprint hint at the company’s endeavors in this arena.
FCC Nod for XO Communications
The recent approval from FCC regarding the $1.8 billion deal to purchase XO Communications Inc.’s fiber-optic network is in line with the company’s focus to expand its fiber assets. This XO deal is expected to expand Verizon’s metro and on-net fiber as well as millimeter wave wireless spectrum holdings in major markets. The XO Communications acquisition will help Verizon serve three of its main domains: business services, consumer FiOS and as a backhaul for its upcoming 5G wireless services. Also, XO Communications’ fiber assets will allow the company to enhance its dark fiber-based solutions for small cell network. The densification of cell network will help the company to install and build its upcoming 5G network.
FiOS in the City of Boston
The Final Cable Television (CATV) License from the City of Boston is based on the $300 million partnership announced between Verizon and Boston in Apr 2016. It allows Verizon to install its high-speed FiOS (Fiber-Optic Service) Internet service throughout the city of Boston. The roll out is expected to take place over the next six years. To date, Verizon has placed more than 160 miles of fiber throughout Boston, including large-capacity fiber-optic "feeder" lines above and underneath city streets. Verizon has also vended parts of its FiOS operations to Frontier Communications Inc. . The fiber-optic deal between Verizon and Boston will enable Verizon to compete against video service provider, Comcast Corp. (CMCSA - Free Report) in the Internet and cable television market of Boston. Comcast is also a cable TV behemoth in the U.S.
Small Cell & Dark Fiber
Along with Verizon, other U.S. telecom behemoths – Sprint Corp. (S - Free Report) , T-Mobile US (TMUS - Free Report) and AT&T Inc. (T - Free Report) – aim to launch their 5G networks in the upcoming years. They have either tested or are in the process of testing 5G technology. However, Verizon claims to have the lead in 5G through its small cell densification and expansion of dark fiber footprint strategy. To this end, Verizon is engaged in reframing spectrum, using updated technology like C-RAN (CloudRAN or Centralized RAN), massive MIMO (Multiple Input Multiple Output) and carrier aggregation. The increase in the adoption of small cells is due to the inconvenience of installing large towers in inaccessible areas.
Winding Up
Verizon’s innovative and strategic efforts to improve its business through the roll out of small cells, deployment of dark fiber based network and fiber-optic technology looks impressive. Notably, this is just the beginning of fiber roll out on Verizon’s part and we hope to see many more bigger deals in the years ahead. This is because the telco’s main aim is to densify its wireless network and win back small business. Moreover, Fiber plays a major role in the 5G push and has implications for enterprise and SMB (small business segment) penetration. The idea of Verizon shelling out more money for other wireline fiber assets would be in line with the rapid consolidation of the fiber wireline market.
Inspite of these efforts, shares of Verizon was almost in line with the Zacks categorized U.S. wireless national industry’s performance in the past one year. Year to date, Verizon has gained 11.70% but failed to beat the industry's growth of 21.21%.
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Will Verizon (VZ) Pursue More Fiber-Optic Deals in 2017?
U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) is on track to strengthen its foothold in the fiber space. The company’s recent XO Communications buyout approval from the U.S. telecom regulator, Federal Communications Commission (FCC), plans to strengthen fiber-optic operations in Boston along with small cell densification and expansion of dark fiber footprint hint at the company’s endeavors in this arena.
FCC Nod for XO Communications
The recent approval from FCC regarding the $1.8 billion deal to purchase XO Communications Inc.’s fiber-optic network is in line with the company’s focus to expand its fiber assets. This XO deal is expected to expand Verizon’s metro and on-net fiber as well as millimeter wave wireless spectrum holdings in major markets. The XO Communications acquisition will help Verizon serve three of its main domains: business services, consumer FiOS and as a backhaul for its upcoming 5G wireless services. Also, XO Communications’ fiber assets will allow the company to enhance its dark fiber-based solutions for small cell network. The densification of cell network will help the company to install and build its upcoming 5G network.
FiOS in the City of Boston
The Final Cable Television (CATV) License from the City of Boston is based on the $300 million partnership announced between Verizon and Boston in Apr 2016. It allows Verizon to install its high-speed FiOS (Fiber-Optic Service) Internet service throughout the city of Boston. The roll out is expected to take place over the next six years. To date, Verizon has placed more than 160 miles of fiber throughout Boston, including large-capacity fiber-optic "feeder" lines above and underneath city streets. Verizon has also vended parts of its FiOS operations to Frontier Communications Inc. . The fiber-optic deal between Verizon and Boston will enable Verizon to compete against video service provider, Comcast Corp. (CMCSA - Free Report) in the Internet and cable television market of Boston. Comcast is also a cable TV behemoth in the U.S.
Small Cell & Dark Fiber
Along with Verizon, other U.S. telecom behemoths – Sprint Corp. (S - Free Report) , T-Mobile US (TMUS - Free Report) and AT&T Inc. (T - Free Report) – aim to launch their 5G networks in the upcoming years. They have either tested or are in the process of testing 5G technology. However, Verizon claims to have the lead in 5G through its small cell densification and expansion of dark fiber footprint strategy. To this end, Verizon is engaged in reframing spectrum, using updated technology like C-RAN (CloudRAN or Centralized RAN), massive MIMO (Multiple Input Multiple Output) and carrier aggregation. The increase in the adoption of small cells is due to the inconvenience of installing large towers in inaccessible areas.
Winding Up
Verizon’s innovative and strategic efforts to improve its business through the roll out of small cells, deployment of dark fiber based network and fiber-optic technology looks impressive. Notably, this is just the beginning of fiber roll out on Verizon’s part and we hope to see many more bigger deals in the years ahead. This is because the telco’s main aim is to densify its wireless network and win back small business. Moreover, Fiber plays a major role in the 5G push and has implications for enterprise and SMB (small business segment) penetration. The idea of Verizon shelling out more money for other wireline fiber assets would be in line with the rapid consolidation of the fiber wireline market.
Inspite of these efforts, shares of Verizon was almost in line with the Zacks categorized U.S. wireless national industry’s performance in the past one year. Year to date, Verizon has gained 11.70% but failed to beat the industry's growth of 21.21%.
Hence, the company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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