New York-based Verizon Communications Inc, is expanding its fiber business. The company announced that it purchased fiber optic operations from XO Communications group. The XO Communications deal, worth $1.8 billion follows the $4.8 billion deal made by Verizon in 2016 to acquire web giant Yahoo.
As a part of the deal with XO Communications, Verizon will integrate all XO operations and facilities effective immediately. The company said in a statement that it expects to achieve significant synergies by incorporating XO’s fiber assets as part of its current network operations. Verizon expects the transaction to deliver more than $1.5 billion in operating and expense savings in net present value. The company also wants to use the network to help boost its 5G technology.
“This transaction with XO will bring significant benefits in how we deliver superior services to our customers,” John Stratton, Verizon executive vice president and president of Operations said. “XO’s fiber network will add ever greater capacity and reach to Verizon’s networks, a combination that will lead to enhanced capabilities, better services and faster roll out of next generation communication networks.”
In addition to the deal with XO Communications, Verizon agreed to lease certain wireless spectrum from former XO affiliate NextLink Wireless. The deal gives Verizon an option to buy NextLink, in compliance with contractual terms.
Verizon’s acquisitions could help the company stay ahead of its competition. AT&T recently rolled out a 5G powered platform called AT&T Network 3.0 Indigo. The 5G network increases download and live streaming speeds.