Verizon’s mission to have the fastest wireless technology among wireless and communication providers got a $1.8 billion boost Monday when the company announced plans to lease spectrum from and acquire XO Communications’ fiberoptic network.
Verizon announced the deal Monday, noting that the transaction with Icahn-owned XO Communications’ Internet protocol and Ethernet networks will allow it to better serve its enterprise and wholesale customers.
In addition to acquiring XO’s fiberoptic network, Verizon will lease the company’s spectrum, with an option to buy the entity that holds the spectrum by 2018.
Bloomberg reports that the leased spectrum is in the ultra high-frequency bands that are designated for development of next-generation 5G networks, which should be upwards of 50 times faster than 4G LTE. Both Verizon and AT&T have recently begun the work of testing 5G, with the hopes of rolling out limited commercial access in the next year.
Verizon says it expects to realize more than $1.5 billion in cost savings after the deal.