Friday, May 15, 2009

A Summary Of The Verizon - Frontier Deal

Yesterday, Verizon and Frontier Communications announced an agreement that would sell off a large chunk of Verizon's rural markets. Here's a quick summary taken from DSL Reports pieces on the deal:

  • Frontier will give Verizon $5.3 billion in Frontier stock and take on an additional $3.3 billion in debt.
  • Frontier will get Verizon landline networks in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia. Wisconsin and some rural areas of California.
  • Frontier will grow to more than 7 million access lines in 27 states and will be the largest provider of voice, broadband and video services focused on rural to smaller city markets in the United States.
  • Frontier will be picking up some FiOS - 41 local franchises and the state of Indiana will be transferred from Verizon.
  • Approximately 11,000 Verizon employees will end up working for Frontier.
  • Verizon Wireless and Verizon Business services in the listed states will not be transferred to Frontier.
  • With this deal Verizon may eventually reach 80% FiOS coverage on their remaining footprint.
  • It is doubtful Fiber to the Home (FTTH) services will be expanded in any of the transferred regions (by Frontier) in the near future.
According to DSL Reports, Frontier has struggled of late to deliver even 3Mbps worth of connectivity to many of its rural users according to posts in their forums, but Verizon CEO Ivan Seidenberg issued a statement saying Frontier would apply their "laser focus" on the needs of rural customers to ensure a smooth transition and quality service.

The deal is expected to take about a year to complete.

No comments: