AT&T, Verizon, Spectrum Enterprise lead in fiber lit business connections; M&A in 2017

Vertical Systems Group (VSG) ranked the leading providers of on-net fiber business connections as of the end of 2016. The research group said that retail and wholesale fiber providers with 10,000 or more on-net fiber-lit commercial buildings in the U.S. qualify for this new benchmark.

VSG’s 2016 U.S. Fiber Lit Buildings LEADERBOARD list includes a mixture of traditional telcos, cable providers and a competitive carrier: AT&T, Verizon, Spectrum Enterprise were the top three followed by CenturyLink, Comcast, Level 3, Cox, Lightower Fiber NetworksZayo, Altice USA and Frontier.

The Challenge Tier of fiber providers includes companies with lit fiber connections to between 2,000 and 9,999 U.S. commercial buildings. Seventeen companies qualified for the 2016 Fiber Lit Buildings Challenge Tier as follows (in alphabetical order): Cincinnati Bell, Cleareon, Cogent, Consolidated Communications, Electric Lightwave, Fairpoint, FiberLight, FiberNet Direct, FirstLight, IFN, Lumos, Southern Light, Sunesys, Unite Private Networks, Uniti Fiber, Windstream and XO.

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Rosemary Cochran, principal at Vertical Systems Group, said the criteria for the leader board list was for network service providers to have fiber installed and fiber transport equipment ready to serve business customers.

“This is commercial buildings and data centers that have fiber in place and there is active service equipment that enables provisioning of commercial services,” Cochran said. “We’re not counting residential fiber or standalone cell towers.”

Cochran added that VSG is not counting near-net buildings where service providers may be passing buildings with fiber but have not connected them yet.  “It is either lit or not lit,” she said.

“On-net fiber lit buildings are valued strategic assets that give retail and wholesale providers a competitive edge in profitably delivering services to business customers. A major benefit of a fiber lit building is ready connectivity with provisioning through service orchestration, without the construction cost and extensive lead time required to light a building,” Cochran added.

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Acquisitions of Fiber Providers happening this year:

“These dynamics are driving this year’s acquisitions among fiber providers that will significantly impact the U.S. fiber landscape. Eighteen of the twenty-eight Fiber LEADERBOARD and Challenge Tier companies have fiber-related transactions just completed or pending.”

One of the largest out of this group is CenturyLink’s pending deal for Level 3, one that will enhance the telco’s on-net fiber footprint.

CenturyLink’s Level 3 acquisition will increase its reach by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA and Latin America, giving the telco a larger footprint to deliver Ethernet and software-defined services.

Some of the other acquisitions that will alter the on-net fiber profile will be Verizon’s recently completed purchase of XO Communications and Crown Castle’s pending acquisition of Lightower.

By purchasing XO, Verizon gained metro fiber networks in 40 major U.S. markets with over 4,000 on-net buildings and 1.2 million fiber miles.

Cochran said that since a number of these deals have not been completed it remains unclear as to what effect they will have.

Crown Castle, which will gain an additional 22,000 buildings, stands out from the crowd since the service provider has been operating the fiber providers it has bought as separate companies.

However, other pending acquisitions being made by Consolidated Communications, Cincinnati Bell and newer players like Uniti Fiber will have an effect.

Consolidated Communications, which will announce its second-quarter earnings tomorrow, recently completed its acquisition of FairPoint. By acquiring FairPoint, Consolidated immediately established itself as the ninth largest fiber player with a presence in 24 states and 8,000 on-net buildings.  This greater density will enable Consolidated to pursue more dark fiber and lit Ethernet service opportunities with a larger mix of business and wholesale customers.

“Out of the companies on the leader board, 18 of them either already completed acquisitions or some are pending,” Cochran said. “Because a lot of deals happened in July with some that are pending such CenturyLink/Level 3, they are not reflected here.”

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Strategic importance of Fiber Assets to deliver business services:

Regardless of when these deals are completed, Cochran added that they show how having a large arsenal of fiber is important to compete for business services.

“There’s a lot that happened in the first half of this year and that’s going to shake things up,” Cochran said. “Just the fact that you have more than half of these companies involved in some kind of transaction shows the value of fiber.”

On the fiber leaderboard, 7 service providers have an ongoing spot on VSG’s Carrier Ethernet Leaderboard report. These providers include: AT&T, Verizon,Spectrum Enterprise, CenturyLink, Comcast, Level 3, and Cox.

Cochran noted that the presence of fiber has coincided with the growth of Ethernet in the domestic U.S. market.

“Fiber-based Ethernet is the most widely deployed technology,” Cochran said. “As those upgrades take place, one of the drivers is trying to get more bandwidth so there’s a correlation between higher bandwidth services and having that fiber in the building.”

“Wholesale services are also a big driver, which becomes a question of service provisioning.  The work that’s being done at the MEF on inter-carrier provisioning and service orchestration across carriers to automate it with standard APIs would help to accelerate new services,” she added.

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Other Fiber Providers:

All other fiber providers with fewer than 2,000 U.S. commercial fiber lit buildings are in the Market Players tier. The 2016 Market Players tier includes more than two hundred metro, regional and other fiber providers, including the following companies (in alphabetical order): Alpheus, Axia, Birch, C Spire, Centracom, Conterra, DQE Communications, EarthLink Business, Fatbeam, Global Capacity, GTT, Hawaiian Telecom, Hibernia, Hunter Communications, Independents Fiber Network, Infostructure, Logix Communications, LS Networks, Mediacom, Monmouth Telecom, Orca Communications, Pilot Fiber, PS Lightwave, Shentel, Silver Star Telecom, Sovernet, Spirit/Palmettonet, Syringa, TDS Telecom, TPX Communications, U.S. Signal, Veracity, Wilcon, WOW and others.

References:

https://www.verticalsystems.com/vsglb/u-s-fiber-lit-buildings-leaderboard/

http://www.fiercetelecom.com/telecom/vsg-at-t-verizon-spectrum-enterprise-take-dominant-spots-net-fiber-business-connections

Verizon’s Huge Increase in Fiber Investments for “5G” Small Cell Backhaul & FTTP

Verizon Communications’ recent surge in buying fiber assets has little to do with its FiOS video and broadband Internet access.  Yet the company expects to benefit from the investments, Senior Vice President Kyle Malady said at the Fiber Connect conference this week. He said Verizon is doubling down on fiber to fuel 5G network builds.  His presentation can be viewed here.

“All the cards are lining up for us to double down on fiber again,” Malady said during his June 13th keynote address at the conference. Malady said balancing CAPEX requirements in a world of 4G, pending 5G, and other key network initiatives may have given the appearance that Verizon was scaling back on fiber investments. But that has now changed and you can thank wireless backhaul for it.

“Fiber is basically the nervous system of the networks of the future,” Malady said and Verizon is making big investments in it. He cited recent announcements with Corning and other fiber suppliers that Malady said has the carrier buying enough fiber to string to “Mars and back.”

This doubling-down in fiber is not driven by expanding FiOS. It’s driven by the need to densify Verizon’s network for 5G.  FTTP applications will be a benefit of this densification. Because of 5G, Verizon will need to backhaul wireless traffic from small cells located at approximately 1,000-foot intervals in urban applications.

Those small cells will require gigabit capable backhaul, which is best delivered through a deep fiber network, says Malady. As a result, Verizon is changing their approach to fiber. They are adding many more strands as they lay this fiber, leading to the ability to offer FTTP services as they accommodate their small cell-heavy 5G network. “All applications can be served out of one fiber sheath,” said Malady.

Verizon’s “One Fiber” in Boston, MA. is their first market for this approach. It’s an approach that Verizon CEO Lowell McAdam stressed at a recent industry conference, suggesting Verizon will have the largest national fiber footprint as a result of their 5G intentions.  Verizon is also partnering with the city of Sacramento, CA.  The theme is: “Designing and Constructing an Integrated Fiber Solution with our Municipality Partners,” according to Malady.

“[5G] leads to a whole new architecture and will require massive bandwidth, deep fiber and flexible access at the edge,” said Malady. This 5G-driven architecture is one reason Verizon is moving to NG-PON2 for their next generation fiber platform.

“We’re going to skip XG-PON and move on to NG-PON2,” Malady said, citing mid-2018 as their commercial launch time frame. NG-PON2 is better suited for 5G because of its wavelength flexibility and capability to eventually scale up to 80 Gbps in capacity.

Malady hinted this new outlook on fiber could lead to Verizon entering markets outside of their traditional territory. He cited ongoing discussions with Sacramento, Calif. for a fiber broadband-based public-private partnership.

New network architecture, according to Verizon:

• Massive bandwidth – deep fiber, flexible access
• Edge Computing
• Dense 5G Wireless
• Unlicensed and shared spectrum
• Software defined infrastructure
• Open source and automation, open RAN

 

References:

http://www.telecompetitor.com/verizon-were-doubling-down-on-fiber-broadband-just-dont-call-it-fios/

https://static.coreapps.net/fiber2017/handouts/106c1f9a-833d-4387-8afa-3b83ace7ea26_1.pdf

https://www.fiberconnect.org/page/education-program

https://app.core-apps.com/fiber2017/event/a041198839018a16ba6025fbe8eca53d

 

 

 

 

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