Verizon...WOW! | Buying Frontier Communications & The History of This Relationship

[Music] smt Nation we are back nation in today's video we're going to talk about this huge deal that Verizon seemingly has made to acquire Frontier Communications since this was announced uh this was an article that was actually posted by The Wall Street Journal and they broke the story and this made waves throughout the entire industry obviously it was a big piece of news on our Channel and I'm here to tell you guys this was quite the brilliant move from Verizon I'm going to tell you guys how they played it why this all made sense and how they're kind of taking advantage of the situation I think to one of the best moves we've seen Verizon make in a long time let's do our history lesson let's talk about what Verizon is getting and why this move is so brilliant so to understand what Verizon is getting at a frontier you kind of have to understand what Frontier is what they were and what they become all right so uh with respect to the history of all this Frontier Communications was basically the Wireline business that Verizon sold back in 2010 the deal was I think approved by the FCC in that calendar year uh somewhere around like mid year and in the process you know they they basically were the Wireline Verizon business so the operations within about 14 States I think it was for like maybe 5 million connected wire lines of of some estimation I think uh that is a pretty sizable Wireline Network and at the time it was all DSL it was copper it was like that for a while but then Frontiers started to invest in their business obviously and much of that has been turning into fiber so in a deal that was valued at about 5.3 billion in stock and about $3.3 billion in cash that kind of lets you know the size and the scale of the financials on that deal so Verizon was paid pretty handsomely for their wiline assets by the way Verizon was also 68% owner of Frontier based on shareholder value what uh they were a majority shareholder Frontier after this deal so what did Verizon do after that deal after they sold all those Wireline assets to Frontier well they invested heavily into the wireless network and they won in Wireless and nobody was even close in fact it wouldn't probably be almost a decade before anybody was actually able to compete and by that it took AT&T a first net contract billions of dollars in investment and then for T-Mobile it took multiple mergers the acquisition and elimination of Sprint along with tons of spectrum in order to just compete with Verizon they absolutely dominated the decade when it came to wireless so Verizon built bu the biggest Network they built the most reliable Network they became the name when it came to wireless industry-leading revenues best in Industry margins huge amounts of free cash flow Verizon dominated on the financial side as well as on the networking side and they acred the largest highest concentration of market share on a national scale no matter where you went folks just had Verizon they built towers and they built more towers and they bought towers and they bought regional carriers and they built one fiber and they expanded their MCI Investments and they just kept doing this network thing after they sold to Frontier and took all those assets and established a wireless and Wireline Kingdom has Frontier done ever since this point well Frontier has been building out a bigger Network they've been upgrading to fiber in all those areas that were with all those outdated assets you know the copper and DSL and of course you know fiber is a better technology it allows you to sell the service at a higher cost because it's a higher performing service you can demand more money so uh it made sense that they were investing into their Core Business the process of getting all these B dollars and all this Government funding they obviously did all the upgrading built new from scratch Greenfield uh builds and uh making themselves a pretty attractive acquisition Target and and that's kind of what we're seeing here this new deal with Verizon acquiring their their old company assets is estimated to be valued at $7 billion so I want you guys to do the math on that this deal is $7 billion the old deal was for $5.3 billion in stock and $3.3 billion in cash they are essentially buying their Network back plus Getting It upgraded to fiber and expanding it free of cost they're literally buying it back for like less than what they sold it for we're not even going to get into inflation and the cost of building networks how it's increased over the course of the last 14 years the last eight years the last 6 years the last two years costs only go up over time so Verizon is making out like a bandit so they sold to Frontier and made tons of money and they became the majority shareholder of that company now they're buying it back at a massive discount and it's been modernized to a large [Applause] extent what a move for Verizon I think Hans vestberg probably gets a tip of the cap I think from a lot of folks can probably acknowledge that this is one hell of a deal we've been seeing a lot of deals being made T-Mobile's been pretty busy in these types of transactions too uh but not to this scale and not to this value and I don't think Verizon is done I think Verizon will be be involved at the very least to get dish assets and those are Wireless assets right they don't own Wireline operations but this firmly puts Verizon back into an expanding fiber company and by fiber I'm not just talking about fiber to their tower sites this is fiber to the premise and it puts them in the Forefront of America in terms of the Midwest and in some places it's Rural America where you know turn rate is very low and the convergence factor is really important and the RPO is really high so hats off to Hans hats off to the team at Verizon I think for striking a great deal uh we'll look back I think at this deal and probably say this was one of the best deals that Verizon has ever made and probably one of the better deals ever made in the industry uh I think Verizon did really good with this one now before we you know just automatically assume this is all good obviously it's not a official until it's official and in the time of the production of this video it is quote unquote a deal that's in the works uh but it's it's probably going to happen I don't think it's going to be restricted I mean why would it um you know there have been a lot of mergers and Acquisitions lately and I don't see that really changing why would it change now for Verizon you know what I mean but um when it becomes official it becomes official and we'll report on it and we'll talk about it and you know I I will tell you guys this you know with Verizon becoming the owner of all this fiber and in some places it's still DSL and the Network's pretty old in Legacy Verizon sells fixed wireless access 5G home internet they'll get those customers onto the 5G home in until they get fiber to their premise that's probably the way they're going to play this so if you're a Frontier customer and you've been using crappy old DSL be on the lookout for upgrades from Verizon if and when they do you know this whole transaction uh things are about to get better for you because you know I think Verizon's got a lot of money to syn into the network and they can upgrade it and make it better for you whether it's through 5G home internet or it's from fiber be on the lookout for some moves from Verizon with this transaction now you guys know where Frontier has been now you know where Verizon has been now you know what's going to be coming down the pipeline and you guys can drop me a comment and tell me what you think about all this I'd love to hear what you have to say on it maybe there's some intricate details I may have missed or there's some things that you had some insight on because you lived in a frontier Market or you had Frontier service and you kind of saw this whole thing play out tell me uh about what your opinions thoughts and experiences are in regards to this transaction and the history of Frontier and Verizon thanks for watching please do comment like share and subscribe for more and we'll see you all on the next video peace smt Nation it is time for me to introduce to you Aura give you guys an incredible Suite of cyber security protections to keep everything that you do online safe keeping you safe from my identity thefts scams online threats including protections for your entire family they offer a pretty much a worry-free trial period obviously the pricing is very competitive starting at $12 per month they've got one simple and easy app for you to use they've got incredible features a million in coverage 24/7 expert fraud support transparent pricing the money back guarantee at 60 days with a free trial no strings attached so with the odds of falling victim to an online crime being one in four this would change everything really should check them out the financial fraud protection 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