Verizon bets on fiber’s staying power as it acquires Frontier for $20B
Verizon buys Frontier for $20B, greatly expanding its fiber network and reaching 10M homes by 2026.
Verizon is undergoing significant consolidation in the internet communications market by acquiring Frontier Communications for $20 billion. Frontier's market cap before the announcement was less than half of this value, indicating the strategic importance Verizon places on this acquisition. Frontier currently serves 2.2 million customers in 25 states, including Washington, DC, and plans to expand its network from 7 million homes to 10 million by 2026.
Verizon has been focused on expanding its Fios fiber network under CEO Hans Vestberg. Combined, the two companies now serve 25 million homes with fiber internet services. This move is reminiscent of 2009, when Frontier acquired some of Verizon’s legacy local exchange business for $8.5 billion (approximately $12.5 billion today).
The acquisition aligns with Verizon’s strategy to remain a leader in fiber optics and to increase competitiveness in more markets. While Verizon’s wireless revenues are projected to grow modestly between 2% and 3.5%, the addition of Frontier’s fiber network is seen as a long-term investment to maintain growth and enhance service offerings to millions more customers.