Verizon to Acquire Frontier A MarketsandMarkets POV

 

 

On September 5, Verizon announced its intent to acquire Dallas, TX-based network provider Frontier Communications in a $20B all-cash transaction. Frontier, founded in 1935, brings 7.2M fiber passings and 2.2M fiber customers in the middle and western United States to Verizon’s existing 1M miles of fiber, 18M fiber passings, and 7M FIOS customers, predominantly on the East Coast of the United States. Fiber has been a growing segment of both residential and commercial broadband for both companies as network operators seek to reverse the tide of cable broadband providers taking share from traditional consumer and business DSL connections. Frontier’s most recent quarter saw $1.4B in revenue with a $123M net loss due to pension liabilities. The company posted $5.75M in revenue in its fiscal 2023 with a net income of $29M.

 

Fiber connectivity, with its combination of high speed and low latency, enables the emerging class of applications that require response times in the single or low double-digit millisecond latency, such as substation-to-substation communication in utilities, vehicle-to-infrastructure applications in transportation, and precision manufacturing such as semiconductors. Last-mile or last-ten-mile fiber connections are also a critical component of edge computing, connecting operational environments to locally located computing and storage.

 

Verizon has identified both fiber and edge computing as key ingredients of its future growth, and this proposed acquisition further builds out the company’s domestic fiber infrastructure. While there will inevitably be overcapacity and overbuild in dense metro environments that both companies serve, Verizon continues to build additional backhaul capacity for its expanding 5G network, wholesale fiber connections to retail network operators, and private networks to enterprises that will benefit from the additional capacity.

 

Key industries that will benefit from this acquisition:

 

Healthcare: With increased demand for telehealth, remote monitoring, and AI-driven diagnostics, healthcare providers will be able to leverage edge computing for real-time patient data analysis. This will improve the accuracy of predictive analytics, boost the efficiency of telemedicine, and reduce latency for critical data exchanges between healthcare devices.

 

Manufacturing and Industrial IoT: The expansion of fiber infrastructure enables greater support for Industry 4.0, where automation, predictive maintenance, and real-time monitoring are key. Edge computing will allow manufacturers to make faster, data-driven decisions that optimize processes, reduce downtime, and enhance production efficiency.

 

Smart Cities and Autonomous Systems: Verizon’s strengthened edge computing network will enhance connected infrastructure in smart cities, powering IoT-enabled traffic management, energy systems, and public safety services. Autonomous vehicles, in particular, will benefit from the low-latency, real-time decision-making capabilities provided by edge computing.

 

Retail and E-commerce: As customer expectations around personalization and real-time inventory management grow, retail will leverage edge computing to enable faster, more personalized experiences, optimize supply chain logistics, and implement AI-driven insights at the local level.

 

By integrating Frontier’s fiber network, Verizon is not only expanding its market reach but also solidifying its position as a leader in edge computing. The immediate synergy between fiber and mobility services creates a robust platform for industries that rely on high-speed, low-latency networks to power their digital transformations. This acquisition will likely accelerate the adoption of advanced AI, IoT, and other edge-driven innovations across these sectors. Centerview Partners, Morgan Stanley and Barclays advised the companies on the transaction.