Verizon has announced that it plans to buy Frontier Communications. The move would give Verizon around two million fiber internet customers, and it would fuel the company’s push into fiber home and business internet services.
Verizon and Frontier have entered into a definitive agreement to merge, with Verizon paying $20 billion for the deal. Verizon already has a ‘Fios’ fiber internet network in some parts of the United States, but the acquisition would expand that with all of Frontier’s existing fiber infrastructure. Frontier says it already has fiber service in 7.2 million “locations” (homes, businesses, apartment buildings, etc.), while Verizon has around 7.4 million Fiber “connections” (individual customers and businesses).
The acquisition would also turn Frontier’s 2.2 million fiber subscribers across 25 states into Verizon customers. There’s not much (if any) overlap between the two networks, partially because Verizon has sold some of its infrastructure to Frontier over the years. For example, Verizon sold its networks in California, Florida, and Texas to Frontier in 2015.
Since Verizon and Frontier aren’t really competing for fiber internet infrastructure in the same regions, this shouldn’t be an anti-competitive move, but it does remove the possibility of future competition between the two companies that could reduce prices. Many Americans still don’t have a real choice between home internet service providers, and the lack of competition often keeps prices high—the wonders of capitalism.
The poor state of home internet providers has field growth for Verizon’s 5G-based home internet, as well as similar services from AT&T and T-Mobile, and now Verizon has looped back around to investing billions of dollars into direct-to-consumer fiber internet. T-Mobile is going with a similar strategy of buying regional fiber ISPs, as it announced plans to acquire Lumos back in April, and in July it said it was buying Metronet.
Verizon said in a press release, “Verizon will gain access to Frontier’s high-quality customer base in markets highly complementary to Verizon’s core Northeast and Mid-Atlantic markets. Frontier’s footprint offers substantial room for increased penetration in both fiber and mobility services and Verizon is well positioned with stores throughout Frontier’s territory.”
Verizon expects the deal to be closed in around 18 months, subject to approval by Frontier shareholders and regulatory agencies.
Source: Verizon
