Verizon buys Frontier for $20 billion to bolster its fiber network

Verizon is buying Frontier Communications for $20 billion to bolster its fiber-optic network.

Verizon Communications Inc. said Thursday that the acquisition will also bolster its expansion into artificial intelligence and connected smart devices.

Frontier has focused on its fiber network capabilities for about four years, investing $4.1 billion to upgrade and expand its fiber network. More than half of its revenue now comes from fiber products.

Frontier, based in Dallas, is priced high, considering its 2.2 million fiber subscribers in 25 states. Verizon has about 7.4 million Fios connections in nine states and Washington, D.C.

Frontier has 7.2 million fiber sites and plans to add another 2.8 million sites by the end of 2026.

”The acquisition of Frontier is a strategic fit,” Verizon chairman and CEO Hans Vestberg said in a prepared statement. ”It continues Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to increase our competitiveness in more markets across the United States, enhancing our ability to deliver premium offerings to millions of customers over our combined fiber network.”

However, there is skepticism about a potential $20 billion acquisition by Verizon.

”The real problem is simply that Frontier’s paltry 3.5% fiber footprint (again, according to the FCC’s late-2023 broadband map) would leave Verizon with a total fiber footprint that still covers less than 13% of the country, with the potential to expand to only about 17% of the country,” wrote Craig Moffett of MoffettNathanson Research. ”A fiber footprint covering 17% of the United States is far too large to be the basis of a national wireless carrier’s strategy.”