Verizon is a 'fiber giant' for 5G, report says

A new report from Cowen declares Verizon as a fiber giant, well positioned to leverage its fiber holdings for its future fixed wireless and 5G plans.

Verizon now has 900,000 global fiber route miles, according to Cowen’s latest “Current State of Fiber” report. It says Verizon is a top five fiber provider in 16 markets outside its ILEC footprint, bolstered by its acquisitions last year of XO’s fiber assets, a portion of WOW’s fiber in Chicago, and dark fiber from Zayo. “Despite a leadership position, Verizon continues its relentless and aggressive fiber densification, especially with metro fiber deployment,” the report authors said.

Overall, the report noted a “significant impact of consolidation” within the industry, including Verizon’s acquisition of XO; and the increasing concentration of fiber controlled by the top providers, which in turn will increase the scarcity value of the remaining independent fiber assets.

While Verizon said in 2015 it was finishing up its Fios build, Verizon launched the “One Fiber” initiative in Boston, which Cowen analysts predict the company will replicate in other cities in the future.

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At the same time, Verizon noted that customer demand for fiber access is offering the company “a growth opportunity” for its broadband business, while also helping to mitigate declines in its copper-based products. In its second-quarter 2018 earnings report, Verizon reported that fiber-based products partially offset revenue declines in both wireline and enterprise segments. Speaking during the company’s recent earnings call, incoming CEO Hans Vestberg said the company’s fiber-based network plans “will continue to be in high demand and can take significant share in mature markets,” and that its fiber build-out “will allow us to take full advantage of the many use cases that will come to bear in 5G.”

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According to the Cowen report, Verizon is deploying multimodal fiber, which will become crucial to its mmWave 5G plans that require many fiber-fed nodes. Verizon’s small cell 5G network architecture will require lots of access to gigabit-capable fiber backhaul; in urban settings, fiber backhaul will be needed at 1,000-foot intervals.

Verizon had previously announced fiber build-outs in 50 markets outside its ILEC footprint, which will serve to prepare the company’s networks for 5G.

“5G is an access technology. There is so much more you need to do to actually have it,” Vestberg said. He added that Verizon will soon roll out 5G fixed wireless services to consumers in Sacramento, Los Angeles and Houston. Verizon has promised that fixed wireless will be its first use case for 5G.

Verizon, of course, is one of many companies deploying fiber. Others that have been active on the fiber scene, and that were mentioned in Cowen's report, include CenturyLink, Zayo, AT&T, Charter and others.

Article updated Aug. 10 to include additional information on fiber providers.