- Bell Canada and Ziply combined would pass about 9 million locations with fiber
- If the deal goes through, Bell Canada wants to pass 12 million fiber locations in North America by 2028
- Ziply will continue to overbuild its copper network in the Pacific Northwest
Fiber M&A is on fire – even with the unknown of the U.S. election tomorrow. This morning, Bell Canada announced it was acquiring Ziply Fiber for $3.65 billion in cash plus the assumption of debt, resulting in a transaction value of about CAN $7 billion (USD $5.1 billion). This deal follows Verizon’s recent announcement that it’s acquiring Frontier for $20 billion.
Today’s announcement between Bell Canada and Ziply would make Bell the third largest fiber internet services provider in North America, after AT&T and Verizon. Currently, AT&T passes 28 million locations with fiber, and Verizon passes 17.8 million. After close of the Ziply deal, Bell Canada will have about 9 million fiber locations, combining its 7.7 million locations in Canada with Ziply’s 1.3 million in the U.S.
Meanwhile, both American companies are pressing the pedal to the metal with ambitious fiber plans. Verizon is in the process of trying to buy Frontier, and if that deal goes through, Verizon says it will pass 30 million locations.
AT&T says it will pass 30 million locations by the end of 2025 and may ultimately choose to pass 45 million locations.
Now, even Bell Canada is getting in on the stretch goals. In today’s announcement, Bell said it has a goal of passing 12 million fiber locations in North America by 2028.
Ziply’s plans in the Northwest U.S.
Fierce Network spoke today with Harold Zeitz, CEO of Ziply Fiber, who reminded us that Ziply got its genesis in May 2020 when it purchased network assets from Frontier in the states of Washington, Oregon, Idaho and Montana. The company was founded by Zeitz and Steve Weed, who’s the executive chairman. Ziply’s current owners are Wave Division Capital and Searchlight Capital, which are selling to Bell Canada.
Zeitz said about two-thirds of Ziply’s broadband footprint is currently fiber, and it’s working to overbuild its remaining copper plant with fiber. “In addition to building in the ILEC footprint, we’re also building outside that footprint in adjacent markets,” said Zeitz.
By “adjacent markets” he explained that there are many towns right next to Ziply markets where Lumen Technologies is the main broadband provider.
“They’re inside the four states and right next to our existing markets,” he said. “With this transaction, Bell will be our new investors and 100% owners of Ziply. They’ve asked us to expand our scope so we hit more towns.”
He said Bell also wants Ziply to accelerate its fiber builds. Ziply has a goal to build fiber in about 80% of its footprint, but it may expand that. And under Bell’s ownership it plans to build 20% faster.
Ziply Fiber will continue to operate independently under its own name and with the same leadership team, and it will continue to be headquartered in Kirkland, Washington. The company already had plans to apply for Broadband Equity, Access and Deployment (BEAD) funds, and Zeitz said, “Our intention is to continue on the path, which includes some BEAD projects.”
He added: “We just want to deliver a refreshingly great experience to all the towns in our four-state area.”
The acquisition is expected to close in the second half of 2025, subject to regulatory approvals.
Consolidation in the fiber space
With Verizon’s pending acquisition of Frontier and AT&T’s joint venture with BlackRock to build fiber networks, you could say there’s a race to deploy fiber in the U.S.
The analysts at AlixPartners say there are more than 400 small fiber providers in the U.S. that are ripe for picking by investors or larger fiber companies.
Fierce asked Zeitz if he expected a lot more deals from other companies wanting to get in on the fiber business. “It’s easy to put on paper as a strategy, but hard to do,” he said. He also said that companies have to get to “a certain size” before it make sense for another company to want to acquire them.
However, “we think there’s tremendous opportunity organically. There are 50-60 million households that don’t have fiber. I think over time we’ll see more acquisitions,” he said.