Frontier Communications, the largest independent fiber-optic internet provider in the US, is on the verge of being acquired by Verizon Communications in an all-cash deal. Sources close to the matter suggest to the Wall Street Journal the announcement could come as early as Thursday. This comes as there have been multiple reports of other interested buyers, including at one time T-Mobile.
This news sent Frontier’s shares soaring by 38%, reaching $38.62, the highest since the company emerged from bankruptcy in 2021. The surge boosted Frontier’s market value to $9.3 billion.
The potential acquisition underscores the escalating race among telecom giants to fortify their broadband services in response to the ever-increasing demand for data usage. Just this past July, T-Mobile and KKR made a substantial $4.9 billion investment in fiber-optic internet provider Metronet.
Verizon’s interest in Frontier seems to stem from its long-standing commitment to fiber-optic technology.
This deal also brings an interesting twist to the relationship between the two companies. In 2015, Verizon sold parts of its landline business to Frontier for over $10 billion. Frontier subsequently faced financial difficulties, leading to bankruptcy, but emerged in 2021 with significantly reduced debt.
Frontier reported adding 92,000 fiber internet customers in the 2nd quarter of 2024 with revenues of $1.48 billion up 2.1% year-over-year. Frontier did report a net loss of $123 million in the 2nd quarter of 2024.
While representatives from Frontier and Verizon have remained tight-lipped, the imminent announcement of this acquisition is expected to significantly impact the telecommunications landscape, particularly in the fiber-optic broadband sector.