- Bell Canada and a PE firm launched Network FiberCo, a joint venture to help Ziply reach 8M fiber locations
- Bell is acquiring Ziply for $5.1B, which will make it the third largest fiber operator in North America
- Ziply will be the exclusive ISP on the JV's wholesale network
There’s a new fiber joint venture in town, as Bell Canada looks to make the most of its Ziply Fiber acquisition.
Bell Canada, along with private equity firm PSP Investments, announced the formation of Network FiberCo, a wholesale network provider that aims to help Ziply accelerate its last-mile deployment and eventually reach 8 million total fiber passings. PSP Investments also agreed to potentially commit at least $1.5 billion to the JV.
The Canadian operator in November unveiled plans to acquire Ziply for $5.1 billion (CAN $7 billion), a move that would make Bell the third largest fiber broadband provider in North America, after AT&T and Verizon.
Bell previously said it will have about 9 million fiber locations once the acquisition closes (8 million of its own and 1.5 million from Ziply). With Ziply constructing another half million and the new JV aiming to bring another 6 million to the table, it sees potential to reach up to 16 million total fiber passings. In comparison, AT&T and Verizon have approximately 28 million and 18 million fiber locations, respectively.
Bell joins the JV train as fiber expansion heats up
The fiber race shows no signs of slowing down thanks to operator expansions bolstered by M&A. Bell Canada’s fiber JV comes after T-Mobile and EQT launched their own venture to acquire Lumos.
“It’s a landgrab and a wholesale fiber JV makes your legs longer as it uses other people’s money to expand,” Recon Analytics Principal Roger Entner told Fierce.
Indeed, time is of the essence as “more of the most attractive locations are being served today” while “increasing[ly] less financially attractive locations remain,” he added.
Given Verizon is buying Frontier for $20 billion and rumors are going around that Lumen might sell its consumer fiber business to AT&T, there aren’t many M&A prospects left aside from smaller rural operators, Entner previously noted.
Ziply, which operates in the Pacific Northwest, was formed in 2020 through the acquisition of old operations in Washington, Oregon, Idaho, and Montana. NetworkFiberCo plans to deploy an additional 1 million fiber passings in Ziply’s existing states as well as another 5 million outside of the operator’s incumbent footprint to reach its 8 million target.
Although Bell refers to NetworkFiberCo as a “wholesale” provider, it won’t be an open access network where multiple ISPs can lease capacity.
“Ziply Fiber will be the exclusive Internet service provider for locations passed by Network FiberCo,” a Bell Canada rep confirmed to Fierce.
Once the acquisition closes, Ziply will still operate independently under its own name and with the same leadership team. Roughly two-thirds of Ziply’s broadband footprint is currently fiber, and the company continues to overbuild its remaining copper plant.