Verizon is buying Frontier Communications in a $20 billion deal to strengthen its fiber network.
Verizon Communications Inc. said Thursday that the acquisition will also shore up its foray into artificial intelligence as well as connected smart devices.
Frontier has concentrated heavily on its fiber network capabilities over about four years, investing $4.1 billion upgrading and expanding its fiber network. It now gets more than half of its revenue from fiber products.
Verizon didn’t like spending money on its fiber network. Cellular had better margins. So they sold much of it to Frontier.
Now Frontier invested in the fiber, and is making money, so Verizon wants it back.
This is an example myopic management, with no long term vision. Share price should drop, but it’ll probably go up.