Verizon Completes $1.8B Acquisition of XO Communications

Verizon has completed its $1.8 billion acquisition of XO Communications’ fiber business in a deal announced almost one year ago.  The company expects to achieve synergies by incorporating XO’s fiber assets as part of its current network operations, with the total operating and expense savings estimated at over $1.5 billion.  The XO takeover is expected to help boost Verizon’s enterprise and wholesale business, as well as improve backhaul for its mobile network. Integration of all XO operations and facilities is expected to commence immediately, Verizon said.

Verizon also says it will lease wireless frequencies from NextLink Wireless, a former XO affiliate, in a deal that gives the carrier an option to buy NextLink.  That might help the mega telco with its plan to offer high speed wireless broadband (4G or 5G).

In September, Verizon’s CFO Fran Shammo told the audience at a Goldman Sachs & Co. conference that Verizon’s fixed wireless 5G, with 1 Gbit/s connections to the home, will take on cable, “or any broadband connection for that matter,” and that deploying 5G will be much cheaper than deploying FiOS. (See Verizon CFO: Eat Our (Fixed) 5G Dust!)

Shammo also said that the company’s key advantage in deploying 5G is the rights to lease 28GHz bandwidth from NextLink. “That covers 40% of the US,” he said then, adding “That’s all licensed for fixed wireless use for the time being, as per the Federal Communications Commission (FCC) rules. We’re hoping that’ll become mobile at some point down the road.”

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