We need more bandwidth. It doesn't really matter who you are, where you are, or what condition you're operating under; as a society, we simply need more bandwidth. With so many uses for the technology and more coming available every day from Internet of Things (IoT) and home automation to mobile workforce tools and streaming video, we just need more bandwidth. Verizon (News - Alert) was recently spotted concluding a move to get us that bandwidth by acquiring XO Communications' fiber optic network business.
The deal in question, valued at $1.8 billion, gave Verizon access to the fiber network XO Communications (News - Alert) was running. With such a network, Verizon can step up access to its own line of network services, and make itself more of a force in the market. It's also set to be a significant push toward rolling out 5G access when it finally comes available sometime in 2020, at last report.
Verizon further plans to get XO Communications' systems up and running as part of Verizon as soon as possible, and expects big value from the purchase. Verizon's looking for better than $1.5 billion in savings—both operational and expense-based—as a result of the purchase.
This wasn't the first such move Verizon made; it also agreed to lease portions of XO Communications affiliate NextLink Wireless' wireless spectrum. Verizon even has an option to buy NextLink outright down the road, though there are some conditions attached to that arrangement.
Verizon's president of operations and executive vice president, John Stratton (News - Alert), noted “This transaction with XO will bring significant benefits in how we deliver superior services to our customers. XO's fiber network will add ever greater capacity and reach to Verizon's networks, a combination that will lead to enhanced capabilities, better services and faster rollout of next generation communication networks.”
All those new technologies that require more bandwidth aren't going away. If anything, the demand is getting more pronounced. With Netflix starting to stream in 4K and more companies going to a mobile workforce, we need all the extra bandwidth we can get. Customers will not be taking tales of poverty and the cost of upgrades as an excuse, and the first company to bite the bullet and upgrade the systems will be rewarded with huge amounts of subscribers. With wireless seen as an increasingly relevant answer to the issue of rural connectivity, having the base laid for 5G as early as possible will be a big help here as well.
Verizon is clearly taking the bandwidth bull by the horns, a move that might well keep its customer base in place and add new customers in to follow.
Edited by Stefania Viscusi