Verizon’s pitch has always been simple: pay us more money than any other wireless carrier, get the fastest speeds and best network coverage in return. But in recent years, it’s been slipping. Thanks to the rollout of 4G technology and major investors by rivals, T-Mobile and AT&T are virtually level in terms of mobile data speed, and coverage is left as Verizon’s last real advantage. That won’t last for long.
So, it makes all kinds of sense that Verizon is investing $1.05 billion to buy millions of miles of fiber-optic cable over the next few years, paving the way for faster 4G, setting the network up for the coming switch to 5G, and rolling out faster broadband to homes.
Verizon announced a deal today with Corning, a US-based fiber-optic manufacturer that also just happens to make the Gorilla Glass covering your smartphone’s screen. The deal commits Verizon to buying up to 12.4 million miles of fiber-optic cable every year until 2020, with a minimum purchase of $1.05 billion.
That’s a quiet promise of a much bigger investment. Buying the cable is just the start; using it to improve Verizon’s backhaul network and home broadband network is the bigger deal.
Believe it or not, but the download speed you receive on your wireless cellphone depends to a good degree on a cable a couple miles away. Your cellphone talks to a nearby cell tower using LTE wireless technology, but once your packets of data get to the tower, they still have to find their way into the wider internet. The cell towers are linked to internet exchanges using a backhaul network, and that network needs to be fast. Think of it like your home internet: it doesn’t matter how good your Wi-Fi router is if the internet coming into your home is painfully slow.
With a constant increase in the amount of data being used by wireless subscribers and the coming switch to 5G, it’s more important than ever that the wired network connecting the wireless towers is fast. Verizon’s presumably hoping that the combination of new cabling and its existing wireless network will be enough to compete with the new wireless network that T-Mobile just spent $8 billion on.