As reported by Reuters, Verizon Communications Inc. (NYSE, NASDAQ: VZ) revealed that it has signed a purchase agreement with Corning Inc. (NYSE: GLW) for the supply of fiber-optic cable and associated hardware to support its wireless broadband networks. The service provider says the deal will run for at least three years with a value of a minimum of $1.05 billion.
Starting next year, Verizon will buy up to 20 million km (12.4 million miles) of fiber each year through 2020. The service provider will use the fiber as part of its efforts to create an optical infrastructure it can leverage to improve its 4G LTE coverage, accelerate its 5G deployments, and support the delivery of high-speed broadband to residential and business customers. Verizon pointed to its One Fiber deployment launched in Boston last year as an example of its intentions.
With several operators looking to deploy fiber for both fiber to the premises (FTTP) and wireless fronthaul and backhaul networks, Verizon said it wanted to ensure it had a place in the front of the line for fiber supply. "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," explained Viju Menon, Verizon's chief supply chain officer. "Securing the required volume of optical fiber and hardware solutions with Corning will ensure we meet our planned rollout schedules."
"Verizon's purchase commitment supports necessary capacity investments across our manufacturing footprint," added Clark Kinlin, executive vice president at Corning. The company previously had announced plans to invest more than $250 million in its optical fiber, cable, and solutions manufacturing facilities. Corning says the new capacity will begin to come online later this year and be fully in effect in 2018.