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Verizon no longer is interested in a potential cable operator acquisition to gain access to additional fiber.
Chairman and CEO Lowell McAdam made the comments during Thursday’s Goldman Sachs Communacopia Conference in New York. Early this year, Verizon reportedly was looking at ways to merge with Charter Communications, potentially continuing the trend of multibillion-dollar telecom-cable consolidation.
The merger would have combined Verizon’s more than 114 million wireless subscribers with Charter’s cable network, which provides television to 17 million customers and broadband connections to 21 million.
When asked if Verizon still is interested in acquiring cable assets, McAdam said “we’ve moved on.”
“We did … go through a process of taking a look at cable companies, (and) the fiber infrastructure isn’t there,” he said.
However, the carrier remains interested in purchasing fiber assets from other service providers. McAdam pointed out Verizon’s $1 billion deal to buy optical fiber from Corning, its $225 million deal to purchase a high-capacity fiber network serving the Chicago market from WideOpenWest (WOW!) and its purchase of Straight Path Communications for more than $3 billion as the basis of the carrier’s “architecture of the future.”
As for cable companies, McAdam said “you certainly have great companies … and they’ve got a good financial model, but for the future that we see that’s going to need that kind of bandwidth for customers, you’re going to have to have deep fiber into the network.”
“To pull out a lot of coax and put in the fiber, I’d rather just put in the fiber,” he said. “So we’ve moved on from those discussions.”
Verizon’s current strategy is “if you can build it better than you buy it, then you build it,” McAdam said.
“I think right now a lot of the fiber companies, their values are a little frothy compared to what you can build for yourself, so that’s the path that we’re on,” he said. “But you do see pockets like [WOW!] in Chicago that make sense to do, so we’re going to keep our options open.”