- Verizon strikes a wholesale deal with Tillman-owned Eaton Fiber
- Eaton will build a network where Verizon will get exclusive fiber service rights for a limited time
- Verizon’s new CEO is wasting no time revamping its fixed and mobile strategy
Verizon inked a commercial agreement with Eaton Fiber, a subsidiary of Tillman Global Holdings, to expand fiber broadband outside of both Verizon's existing Fios footprint and its future Frontier markets.
Details are scant about the locations the network will reach, but Verizon seems to be getting a decent deal with relatively little capital investment.
Eaton will be responsible for funding and building out the network, as well as maintenance and installation. Verizon, which is handling the sales, marketing and customer service side, will be the exclusive retail provider of residential broadband services “through the build phase and for an additional time period," according to a statement by the two companies.
The phrasing suggests the Eaton network could eventually become open access, also indicated by the Eaton website. A move to open access wouldn’t be too surprising given Tillman’s involvement. Tillman Global is the parent company of Tillman FiberCo, which is building an open access network primarily in Florida (with T-Mobile as a tenant) but plans to expand into other states.
Verizon is following in the footsteps of its competitors, as AT&T continues to build out Gigapower and T-Mobile works with Tillman and other open access operators like Intrepid. The Verizon move is long overdue, according to New Street Research.
“AT&T and T-Mobile have been actively entering into JVs and wholesale agreements for the past 3 years. It was only a matter of time before Verizon also entered into similar agreements,” wrote David Barden, New Street’s head of U.S. communications, in a note to investors.
He predicts Eaton is “only the first of many” wholesale deals Verizon is contemplating. The company may even be mulling over more M&A to pick up the pace of its fiber passings.
Schulman starts steering the ship
The Eaton announcement comes less than a month after Verizon abruptly named Dan Schulman as its new CEO. Analysts see Schulman as a short-term fixer for Verizon’s persistent postpaid subscriber losses.
Schulman is also trying to get Verizon’s fiber strategy back into gear, according to Recon Analytics Principal Roger Entner.
Verizon currently plans to reach 35-40 million total fiber locations through Frontier in the coming years and pass 650,000 Fios locations by the end of 2025. But Verizon's fiber uptake is lagging, as fixed wireless access (FWA) makes up most of its broadband net adds.
Verizon's Frontier deal raised questions around the pace of its fiber build.
“Dan Schulman just answered the question by speeding up with the Tillman agreement,” he said.
Schulman told Verizon employees in a memo that the company under his leadership will “move quickly and boldly to win in both mobility and broadband.”
The Eaton fiber deal came shortly after Verizon announced it’s acquiring Starry to expand its urban FWA footprint. Furthermore, the company last week introduced a $25/month low-cost FWA plan – likely to meet California’s regulatory requirements for the Frontier merger.