Key Points:
- Verizon purchases Frontier for $20 billion.
- The acquisition will boost Fios fiber internet service reach.
- Deal expected to close in 18 months, pending regulatory approval.
Verizon has announced the acquisition of internet service provider Frontier for $20 billion, a strategic move aimed at expanding its fiber broadband reach across the U.S.
The all-cash deal adds 2.2 million subscribers to Verizon’s Fios fiber internet service, broadening its customer base and strengthening its edge network for business users. Verizon claims the acquisition will offer Frontier customers “more choice” while building a market-leading network that will expand even before the deal finalizes.
Both companies’ boards of directors have approved the acquisition, and it’s anticipated to close within the next 18 months, subject to regulatory approval. However, large-scale telecom mergers like this often face scrutiny, and it remains to be seen if regulators will greenlight the deal.
Interestingly, this merger brings the two companies full circle—Verizon had sold some of its landline assets to Frontier back in 2015. Frontier later faced financial difficulties, leading to its bankruptcy filing in 2020. Since then, the company has refocused on providing fiber internet services, making it an attractive acquisition target for Verizon.
While Frontier is smaller than some other telecom players, the deal could still raise concerns among regulators. The Federal Communications Commission (FCC) has taken a tough stance on Big Tech and telecom mergers, particularly those that could limit competition or create regional monopolies. In Frontier’s service areas, customers may not see additional options, which could be a sticking point.
Nevertheless, Verizon feels pressure to act. As fiber competition heats up with players like AT&T, Google, and Sonic, and alternative technologies like 5G fixed wireless and satellite broadband from SpaceX’s Starlink emerge, Verizon risks losing market share if it doesn’t expand quickly.
The acquisition represents a significant step for Verizon as it competes to provide faster, more widespread fiber internet services in a crowded and competitive market.
