Verizon Expands DSL Services through Strategic Acquisitions and Mergers

Strategic Insights -

Verizon Communications, one of the largest telecommunication companies in the US, has continued its expansion in the digital subscriber line (DSL) market despite the ongoing strike by a third of its workforce. The company has announced two significant deals: the acquisition of OnePoint Communications and the merger of its DSL operations with those of NorthPoint Communications. This strategic move is aimed at creating a new force in national DSL services, providing customers with access to high-speed connections and a wider range of services.

Key Takeaways:

  • Verizon has acquired OnePoint Communications, a privately-held company providing DSL services to apartment and office buildings in nine major US metropolitan markets.
  • The merger of Verizon's DSL operations with NorthPoint Communications will create a new company, with NorthPoint taking a 55% stake in the joint venture.
  • The deal involves an investment of around $800 million by Verizon, with $350 million paid out to shareholders of the old NorthPoint.
  • The combined company will have over 3,000 operational central offices, passing approximately 63 million homes and businesses in 163 metropolitan statistical areas.
  • Verizon Online will resell NorthPoint's DSL service nationally as part of the deal.
  • The merger is expected to be completed in the first quarter of 2001.

Statistics:

  • $800 million: The amount invested by Verizon in the joint venture.
  • $350 million: The amount paid out to shareholders of the old NorthPoint.
  • 1,500: The number of central offices across the US operated by NorthPoint.
  • 9: The number of major US metropolitan markets served by OnePoint Communications.
  • 163: The number of metropolitan statistical areas passed by the combined company.
  • 63 million: The number of homes and businesses passed by the combined company.
  • 2001: The year the merger is expected to be completed.

Sources:

  • [Verizon Communications press conference]
  • [Lawrence Babbio, President of Verizon, and Liz Fetter, President of NorthPoint]
  • [NorthPoint Communications Web site: http://www.northpoint.net ]
  • [Verizon Communications Web site: http://www.verizon.com ]