Sunday, 20 August 2017

Verizon splashes $225m on Chicago fibre network

By Nick Wood, Total Telecom
Wednesday 02 August 17

Deal will reduce U.S. telco's backhaul leasing costs, support its future 5G network.

Verizon late on Tuesday agreed to acquire cableco WideOpenWest's (WOW's) fibre network in Chicago for $225 million (€189.91 million). Verizon already uses the network to backhaul its macro sites and small cells; taking direct ownership of the infrastructure cuts down on leasing costs…

Verizon late on Tuesday agreed to acquire cableco WideOpenWest's (WOW's) fibre network in Chicago for $225 million (€189.91 million).

Verizon already uses the network to backhaul its macro sites and small cells; taking direct ownership of the infrastructure cuts down on leasing costs, the U.S. telco said.

"This acquisition will also help us create comprehensive digital solutions for small-and-medium business and enterprise customers," said Hans Vestberg, president of network and technology at Verizon, in a statement.

WOW is still rolling out its Chicago fibre network, and the agreement with Verizon includes an additional $50 million investment to complete the deployment, which is expected at some point during the second half of 2018.

When complete, the network will connect more than 500 macro sites and more than 500 small cells.

WOW said it will use the sale proceeds to pay down debt.

"This transaction is consistent with WOW's stated objective of reaching an optimal leverage profile and allows us to continue to focus on areas of growth for residential and commercial services with our Internet-centric outlook and emphasis on expanding our markets through edge-out builds," said WOW CEO Steven Cochran.

Tuesday's deal forms part of Verizon's strategy of building a next-generation fibre platform to support its 4G network and underpin its 5G network further down the line.

In May, Verizon signed a $300 million supply agreement with fibre cable maker Prysmian. A month earlier, it signed a similar deal with Corning worth $1 billion.

"Today's announcement is another example of Verizon's commitment to invest in multi-use fibre to provide customers with next-generation broadband services, such as smart cities and 5G," Vestberg said.

Verizon expects to complete the deal early in the first quarter of 2018.

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