Verizon Communications Inc. (NYSE: VZ) announced that it has already moved on from the plan to acquire cable companies as a way to get the fiber infrastructure, and it will focus on building up its own fiber infrastructure. Shares of the company dropped 0.5% to $47.02 per share before the market open on Thursday.
As the company tested advanced fiber networks in markets, they found that deeper infrastructure than current cable networks is needed. Verizon planned to build the fiber infrastructure to support 5G wireless and its other bandwidth-intensive offers.
“About a year ago we went through a process of taking a look at cable companies, but the fiber infrastructure isn’t there,” said Lowell McAdam, the chairman and CEO of Verizon. “You certainly have great companies that have got a good financial model, but for the future that we see to need that kind of bandwidth for customers you have to have deep fiber in the network.”
Earlier this year, Verizon announced to buy up to 12.5 million miles of fiber per year from Corning Inc. for the next three years, which is worth at least $1.05 billion. In 2016, the company bought Yahoo’s core business for $4.48 billion.
According to McAdam, Verizon expects to achieve cost savings of $10 billion from operating and capital expenses over four years.