Infrastructure

Verizon to purchase 12.4 million miles of fiber per year through 2020

Verizon Communications announced a deal that will further its commitments to growing its wireless broadband network nationwide, as the landscape for telecom companies only becomes more competitive and crowded.

The agreement calls for Corning a New York-based manufacturer of materials primarily for industrial and scientific applications, to provide up to 12.4 million miles of optical fiber each year for Verizon to purchase starting in 2018 and lasting until 2020, with a minimum purchase commitment of $1.05 billion.

"This new architecture is designed to improve Verizon's 4G LTE coverage, speed the deployment of 5G, and deliver high-speed broadband to homes and businesses of all sizes," Verizon said in a statement. Verizon launched One Fiber, what has been called a more "nontraditional Fios build" for the company, in Boston last year.

On its website, Verizon describes Fios as giving consumers "a 100 percent fiber-optic network that allows you to enjoy the internet speed you crave, the TV channels you love and a home phone that's reliable."

"Our plans [in Boston] identified a shortfall in fiber supply, and Verizon has been working with business teams to forecast demand and fill supply gaps with existing suppliers," Verizon Chief Supply Chain Officer Viju Menon said in a statement. "Securing the required volume of optical fiber and hardware solutions with Corning will ensure we meet our planned rollout schedules."

Verizon said it's been "reinventing" a network architecture of late — one that supports a "next-generation fiber platform" to support all of its business segments.

FCC Chairman Ajit Pai praised the news. The deal “heralds the construction of ‘densified’ 5G networks that will benefit American consumers,” said Pai. “It will create thousands of high-quality jobs building and laying fiber.”

The deal coincides with the FCC’s goal of closing the digital divide, added the chairman. He noted the Commission has taken action to promote spending on broadband deployment and will vote on additional proposals today to “unleash major capital expenditures on next-generation networks.”

Verizon has been reinventing its network architecture around a next-generation fiber platform that will support all of the company's businesses. This new architecture is designed to improve Verizon's 4G LTE coverage, speed the deployment of 5G, and deliver high-speed broadband to homes and businesses of all sizes.

Roger Gurnani, Verizon's chief information and technology architect, commented, "Corning's unique combination of capabilities delivers solutions that provide us with performance and cost advantages as we continue to expand our network coverage and capacity."

Viju Menon, Verizon's chief supply chain officer, said: "Our plans identified a shortfall in fiber supply, and Verizon has been working with business teams to forecast demand and fill supply gaps with existing suppliers. Securing the required volume of optical fiber and hardware solutions with Corning will ensure we meet our planned rollout schedules."

Clark Kinlin, executive vice president, Corning Incorporated, said: "We are pleased that Verizon recognizes the value of Corning's innovative solutions in deploying next-generation converged optical infrastructure, such as One Fiber, more quickly and cost effectively. Verizon's purchase commitment supports necessary capacity investments across our manufacturing footprint."

Over the past several months, Corning has announced plans to expand capacity and to invest more than $250 million in its optical fiber, cable and solutions manufacturing facilities to help meet the demand of its global carrier and enterprise customers. Corning expects these capacity expansions to begin to come online in 2017 and become fully operational in 2018.