The acquisition is intended to help Verizon extend its suite of network services to its enterprise and wholesale customers, and also to densify its cellular network and to deploy new 5G technologies.
"This transaction with XO will bring significant benefits in how we deliver superior services to our customers," said John Stratton, Verizon executive vice president and president of Operations. "XO's fiber network will add ever greater capacity and reach to Verizon's networks, a combination that will lead to enhanced capabilities, better services and faster rollout of next generation communication networks."
Integration of all XO operations and facilities is expected to commence immediately. The company expects to achieve significant synergies by incorporating XO's fiber assets as part of its current network operations. Verizon anticipates the transaction will deliver in excess of $1.5 billion in operating and expense savings in net present value.
In addition to the fiber transaction, Verizon has entered into an agreement to lease certain wireless spectrum from former XO affiliate NextLink Wireless. Verizon has an option, exercisable under certain circumstances, to buy NextLink.