Verizon’s CEO sees potential synergies from its pending Frontier acquisition

Fiber expansion ahead

Anyone watching Verizon’s Frontier acquisition will wonder how it will affect the rate at which Verizon expands fiber to more locations.

While it still wants to complete the acquisition first, Verizon has indicated that it will perform over 1 million deliveries annually.

Verizon and Frontier have approximately 10 million fiber customers in 31 states and Washington DC, with fiber networks that pass over 25 million premises. Both companies expect to increase their fiber penetration between now and closing.

“We’ve said we want to do plus 1 million passes. And some people take it as 1 million,” Vestberg said. “The plus is significant here because we want to do it disciplined and have the best return on investment.”

He added: “So we see that possibility, but we want to close first.”

Verizon wants to acquire Frontier to address 35 million to 40 million households. Vestberg emphasized, however, that one must evaluate the markets one buys from Frontier.

“Where I’m planning it and how we’re going to do it, it’s too early to say, to know exactly where we’re going to implement it because it’s very different to implement in a rural area and suburban area, in an urban area,” he said . “So there’s a lot of factors that have to go into it, including where the market is in general.”

Consumer-controlled broadband, wireless offers

By expanding its wireline and wireline broadband reach, Verizon is confident it can make a stronger case for converged offerings.

Vestberg said having a near-ubiquitous broadband footprint is a key foundation for convergence.

“Today the market is not super high on convergence because nobody has a nationwide broadband footprint,” he said. “I think we’re getting as close as possible. We aim to cover over 100 million households with broadband in a few years.”

Although it has a more prominent broadband footprint, Verizon is better positioned to offer what Vestberg says is a “completely different offering,” Verizon sees the converged option as either demand- or consumer-led.

“If the customer wants to buy wireless and broadband from us, we will sell it,” he said. “And there are some values ​​that we can share because they are lower when it comes to the building, customer satisfaction and all that, as well as the operations.”

He added: “It’s not like, hey, if you take my broadband business, I’ll give you wireless” because we want them to be independent.”

The other potential benefit that Verizon could gain from converged offerings is customer retention.

“With the growth of the broadband base, we will have more combined customers,” Vestberg said. “It will be important over time because the more services you have, horizontally or vertically, the lower the churn. So it has benefits for us as well, and we’re willing to share that, but we want it to be demand-driven and consumer-led.”

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