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Verizon Expands 100G Footprint

Zacks Equity Research

Verizon Communications Inc. (VZ) recently announced the expansion of its 100G network technology to the U.S. and European markets. The company is taking up its 100G to additional 0,921 kilometers (13,000 miles) in the U.S. and 2,600 kilometers (1,616 miles) in Europe to meet the growing network traffic demands. The latest ethernet technological solution not only supports network traffic but also strengthens the deployment of 4G LTE services in high traffic areas and cloud usage, requiring higher bandwidth.

So far, Verizon remains successful in deploying 100G on selected areas in the U.S., including Atlanta to Tampa, Kansas City to Dallas and Salt Lake City to Seattle. In Europe, the company has expanded this network infrastructure in routes between London and Paris, and London and Frankfurt. These network routes represent a high traffic zone, which can be facilitated with 100G deployments to make operations easy. 

In Nov 2007, Verizon became the first operator in the U.S. to successfully complete the trial of 100G technology. Several trials followed and in Mar 2011, the company deployed the 100G network in Europe, thereby expanding infrastructure and performance for its customers. Following the European launch, Verizon successfully launched the network technology in several U.S. markets.

The appetite for cloud based and video streaming services has increased in the past few years. Increasing penetration of smartphones has increased the demand for wireless data services. Unprecedented uses of these services are driving bandwidth demand for major carriers including archrival AT&T Inc. (T).

We believe Verizon is expanding its 100G technology to meet this huge bandwidth demand. Additionally, the expansion will build on the company’s leading position in the Ethernet market, thereby enhancing the end-users experience.

Verizon, which operates with other telecom companies like Sprint Corp. (S) and CenturyLink, Inc. (CTL) has a Zacks Rank 3 (Hold).

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