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Verizon allocates $1.05 billion to install new optical fibre across its US network

Verizon truck

© Flickr/cc-licence/jseliger2

  • Three-year minimum purchase agreement with Corning
  • Up to 20 million kilometres of optical fibre each year
  • Follows last year’s initial deployment in Boston
  • FCC says it will create “thousands of high-quality jobs”

US telco Verizon has taken steps to boost its network transport capacity ahead of a 5G launch and further broadband access deployments. Verizon Communications yesterday announced a three-year minimum purchase agreement with cable manufacturer Corning to provide optical fibre cable and associated hardware. Verizon will purchase up to 20 million kilometres of optical fibre each year from 2018 through to 2020, with a minimum purchase commitment of $1.05 billion.

The telco has been busy redesigning its network architecture around a next-generation fibre 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.

Only yesterday TelecomTV covered the strategy of developing networks as shared platforms, rather than a mix of individual network appliances. A study from ABI Research highlighted Verizon as a leading proponent of this approach, making network resources virtual, distributed and software controlled, leading to what ABI Research called the implementation of an “untelco” strategy, selling tailored network resources to different verticals.

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

In an initial deployment, Verizon launched One Fiber in Boston in 2016 and plans to invest $300 million over six years to deploy it throughout the city, replacing the installed base of copper cables. The telco was helped by securing a deal with the city’s mayor to provide an expedited permitting process to encourage the build-out, in exchange for a $100,000 contribution to support a mobile hotspot lending program at the Boston Public Library. It is unclear if Verizon plans to replicate this partnership model, which also included Smart City trials, across the US.

Closing the digital divide

“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,” said Clark Kinlin, executive vice president, Corning. “Verizon’s purchase commitment supports necessary capacity investments across our manufacturing footprint.”

Corning has announced plans to expand capacity and to invest more than $250 million in its optical fibre, 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.

“This agreement heralds the construction of ‘densified’ 5G networks that will benefit American consumers,” said FCC Chairman Ajit Pai, commenting on the announcement. “It will create thousands of high-quality jobs building and laying fibre. And it will go a long way toward closing the digital divide. The FCC’s top priority is closing the digital divide that has persisted for far too long. And the key to meeting that priority is setting stable, market-friendly rules that will lead to investment in online infrastructure.”

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