Two Million Passings a YearNarrow moat

Verizon (VZ) — moat facet

Verizon plans at least 2.0 million new fibre passings in 2026, about 7% growth in the footprint, inside a capital budget that did not grow.

Fibre is a moat only where it is in the ground, so the build pace is the growth rate of the moat. Verizon's 2026 capital budget of $16.0 billion to $16.5 billion "includes a fiber build pace of at least 2.0 million passings in 2026"1. In October 2025 it also entered "a commercial fiber arrangement with an affiliate of Tillman Global Holdings to further increase our fiber access reach"2, and on 30 January 2026 it bought Starry, a fixed wireless provider "serving multi-dwelling units in five markets across the U.S."3.

Verizon fibre build and fill, 2026 plan and pace (thousands)2,000+Passings planned, 2026620Fiber net adds, Q2 2026 x4Verizon Q4 2025 results release guidance; Q2 2026 results release; annualised pace is a calc
Passings are being built about three times as fast as they fill.

Two million passings a year on a base of "over 30 million homes and businesses"4 is about 6.7% growth in the footprint5. That is faster than anything else in Verizon is growing.

The economics of a passing are the whole question. A home passed but not connected costs money and earns nothing; the return comes from the share of passed homes that sign up. Verizon added 155 thousand fibre connections in the June 2026 quarter6.

The build also meets a limit set elsewhere in the budget. Capital spending is guided flat7, so fibre passings compete with the wireless network for the same dollars, argued on Spending Below Depreciation.

The build is also being financed by the cash freed from wireless. Capital spending in the first half of 2026 was $8,210 million8, and the full-year guide of $16.0 billion to $16.5 billion9 has to cover both networks. The union contract commits to hiring "A minimum of 500 new technicians" in New York10, part of the workforce for the build.

If the 2026 build falls short of 2.0 million passings, or fibre net additions stay near 155 thousand a quarter while passings grow, the footprint will be growing faster than the customers on it.

Moat trajectory: Widening

At least 2.0 million passings planned in 2026.

The number that tests this moat
Reported
Fiber net additions, latest quarter
155 thousand (Q2 2026), against 32 thousand in Q2 2025

The rate at which new passings fill; about 620 thousand a year against 2 million passings is the fill question.

Source: Verizon Q2 2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
Copper and Lead-Sheathed Cable
Verizon says lead-sheathed copper cable could bring material costs it cannot yet estimate, a liability the fibre build leaves behind rather than…
References
  1. ReportedVerizon's 2026 capital budget of $16.0 billion to $16.5 billion "includes a fiber build pace of at least 2.0 million passings in 2026".
    Verizon fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99 - full-year operating statistics, segment EBITDA, free cash flow 2020-2025 and 2026 guidance - cash flow, capital spending, debt and 2026 guidance. — FY2025 · publ. 30 January 2026 · source ↗
  2. ReportedIn October 2025 it also entered "a commercial fiber arrangement with an affiliate of Tillman Global Holdings to further increase our fiber access reach", and on 30 January 2026 it bought Starry, a fixed wireless provider "serving multi-dwelling units in five markets across the U.S.".
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  3. ReportedIn October 2025 it also entered "a commercial fiber arrangement with an affiliate of Tillman Global Holdings to further increase our fiber access reach", and on 30 January 2026 it bought Starry, a fixed wireless provider "serving multi-dwelling units in five markets across the U.S.".
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  4. ReportedTwo million passings a year on a base of "over 30 million homes and businesses" is about 6.7% growth in the footprint.
    Verizon fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99 - full-year operating statistics, segment EBITDA, free cash flow 2020-2025 and 2026 guidance - income statement, segment EBITDA and highlights. — FY2025 · publ. 30 January 2026 · source ↗
  5. Moat Explorer calcTwo million passings a year on a base of "over 30 million homes and businesses" is about 6.7% growth in the footprint.
    Moat Explorer calculation from Verizon's reported figures ($ millions unless stated; calendar years). Revenue and profit over the decade: revenue 2015-2025 (138,191 / 131,620) ^ (1/10) - 1 = about 0.5% a year; 138,191 / 131,620 - 1 = +5.0%; range 138,191 - 125,980 = about 12.2bn; 2027 revenue of 142bn would need (142 / 138.191) ^ (1/2) - 1 = about 1.4% a year; operating income 29,259 / 30,615 - 1 = -4.4%; net income 17,174 / 17,879 - 1 = -3.9%; diluted EPS 4.06 / 4.37 - 1 = -7.1%; total assets 404,258 / 244,175 - 1 = +65.6%. Segments 2025: Consumer share of segment operating income 29,628 / (29,628 + 2,532 = 32,160) = 92.1% (2024 29,484 / 31,542 = 93.5%; 2023 29,011 / 31,077 = 93.4%); Business share 2,532 / 32,160 = 7.9%; Q2 2026 Consumer 8,032 / (8,032 + 991 = 9,023) = 89.0%, Q2 2025 7,643 / (7,643 + 724 = 8,367) = 91.3%; Consumer operating margin 29,628 / 106,807 = 27.7%, Business 2,532 / 29,069 = 8.7%; Business share of segment revenue 29,069 / 135,876 = 21.4%; shared network and service costs 17,991 + 9,717 = 27,708, Business share 9,717 / 27,708 = 35.1%; Consumer share of segment EBITDA 43,801 / (43,801 + 6,644) = 86.8%; Consumer revenue 2025 106,807 / 102,904 - 1 = +3.8%, 2023-2025 106,807 / 101,626 - 1 = +5.1%; Consumer service revenue 80,617 / 77,127 - 1 = +4.5%; Consumer equipment 21,779 - 23,930 = -2,151, about 2.2bn below cost; Business revenue 29,069 / 30,122 - 1 = -3.5%; Enterprise and Public Sector 13,532 / 15,076 - 1 = -10.2%; Business Markets and Other 13,555 / 12,697 - 1 = +6.8%; Wholesale 1,953 / 2,313 - 1 = -15.6%; institutional and wholesale decline (15,076 - 13,532) + (2,313 - 1,953) = 1,904; Q2 2026 Consumer revenue 26,242 / 26,648 - 1 = -1.5%; Business revenue 7,155 / 6,973 - 1 = +2.6%; restatement 7,275 - 6,973 = 302 a quarter; mobility and broadband service revenue 2025 75,923 + 14,940 = 90,863. Customers: T-Mobile postpaid accounts 34,700 - 34,237 = 463 more than Verizon; T-Mobile 34,700 / 31,502 - 1 = +10.2%, 34,700 - 31,502 = 3,198; Verizon accounts 34,237 - 34,646 = -409, -1.2%; ARPA premium 168.35 / 152.91 - 1 = +10.1%; cable lines 10,187 + 12,540 = about 22.7 million; cable Q2 net adds 448 + 406 = 854 thousand, 854 / 184 = 4.6 times; Q2 net adds share 184 / (184 + 432 + 448 + 406 = 1,470) = 12.5%; fibre net adds 155 / 367 = 42%; annual churn at 0.92% a month 0.92 x 12 = 11.0%, about one customer in ten; 0.1 point on 94 million = about 94 thousand phones a month; prepaid churn 3.59 / 0.92 = 3.9 times; prepaid annual loss 1 - (1 - 0.0359) ^ 12 = 35.5%, average life 1 / 0.0359 = 27.9 months, a little over two years; revenue per postpaid line 170.62 / 3.67 = 46.49 (2025), 167.26 / 3.61 = 46.33 (2024); ARPA 2025 170.62 / 167.26 - 1 = +2.0%; ARPA Q2 2026 168.35 / 170.79 - 1 = -1.4%; ARPA H1 2026 167.50 / 170.30 - 1 = -1.6%; wireless service revenue 83,703 / 82,073 - 1 = +2.0%; wireless service share of revenue 83,703 / 138,191 = 60.6%; FWA revenue 2,940 / 2,139 - 1 = +37.4%; FWA revenue share 2,940 / 138,191 = 2.1%; fibre annualised 155 x 4 = 620 thousand; passings 2.0 / 30 = 6.7%; passings to fill 2,000 / 620 = 3.2 times. Spectrum and capital: C-Band 45.5 + 7.5 = 53.0bn; licences share of assets 158,159 / 410,186 = 38.6%; licences over goodwill 158,159 / 30,664 = 5.2 times; licences over equity 158,159 / 105,196 = 1.5 times; wireless service revenue per dollar of licences 83,703 / 157,039 = 0.53; spectrum bought June 2026 1.0 + 3.2 = 4.2bn; capex / revenue 17,011 / 138,191 = 12.3% (2025), 23,087 / 136,835 = 16.9% (2022); capex 17,011 / 23,087 - 1 = -26.3%; capex less depreciation 17,011 - 18,349 = -1,338; ROIC averages 2015-2019 (10.8 + 9.1 + 12.7 + 8.2 + 11.3) / 5 = 10.4%, 2021-2025 (8.7 + 7.3 + 5.0 + 7.0 + 7.1) / 5 = 7.0%; interest expense 6,694 / 5,524 - 1 = +21.2% (2023-2025); Q2 interest 1,985 / 1,639 - 1 = +21.1%; interest / operating income 6,694 / 29,259 = 22.9%. Cost, cash and capital returns: employees 89.9 / 99.6 - 1 = -9.7%; severance 533 + 1,733 + 1,715 + 397 = 4,378, about 4.4bn; adjusted EBITDA margin 49,997 / 138,191 = 36.2% (2025), 48,791 / 134,788 = 36.2% (2024); Q2 2026 operating income 7,179 / 8,172 - 1 = -12.2%; free cash flow Q2 6,426 / 5,167 - 1 = +24.4%; adjusted EPS less diluted EPS 4.71 - 4.06 = 0.65; phones sold below cost 28,976 - 25,470 = 3,506, about 3.5bn; dividends / free cash flow 11,481 / 20,126 = 57.0% (2025), 5,864 / 10,209 = 57.4% (H1 2026); dividends / net income 11,481 / 17,174 = 66.9%; dividends per share 2.735 / 2.230 - 1 = +22.6%, (2.735 / 2.230) ^ (1/10) - 1 = 2.1% a year; dividend cost a quarter 0.7075 x 4,155 = about 2,940; buyback average 3,500 / 72.047 = about $48.58 a share; shares 4,155 / 4,217 - 1 = -1.5%; free cash flow yield 21.53 / 193.94 = 11.1%; cash returned about (11.5 + 4.5) / 193.94 = 8.2% of market value; net unsecured debt 128,682 - 110,053 = 18,629; backlog 55.2 / 58.1 - 1 = -5.0%; backlog months 58.1 / 138.191 x 12 = about 5.0; device receivables 34,004 / 31,308 - 1 = +8.6%, allowance 1,628 / 1,315 - 1 = +23.8%; TracFone 3.5 + 3.0 = 6.5bn plus up to 0.65bn. Valuation: Frontier price / market value 22.3 / 193.94 = 11.5%; market value 193.94 / 253.94 - 1 = -23.6% (against end-2019), 193.94 / 188.06 - 1 = +3.1% (against end-2015); target 51.58 / 46.68 - 1 = +10.5%; year-end market value over net income 188.06 / 17.879 = 10.5 (2015), 217.61 / 13.127 = 16.6 (2016), 215.92 / 30.101 = 7.2 (2017), 232.30 / 15.528 = 15.0 (2018), 253.94 / 19.265 = 13.2 (2019), 243.11 / 17.801 = 13.7 (2020), 215.12 / 22.065 = 9.7 (2021), 165.47 / 21.256 = 7.8 (2022), 158.49 / 11.614 = 13.6 (2023), 168.34 / 17.506 = 9.6 (2024), 171.74 / 17.174 = 10.0 (2025); trailing twelve months to June 2026 revenue 138,191 - 67,989 + 68,693 = 138,895, net income 17,174 - 9,882 + 8,880 = 16,172, 193.94 / 16.172 = 12.0, 193.94 / 138.895 = 1.40 - customers, churn, ARPA and competitors. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Verizon's Forms 10-K and 10-Q, quarterly results releases, the recast segment revenue 8-K, peer results releases (T-Mobile, AT&T, Comcast, Charter) and market data; operands shown in the source line.
  6. ReportedVerizon added 155 thousand fibre connections in the June 2026 quarter.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - broadband statistics: fiber and fixed wireless connections and net additions. — Q2 2026 · publ. 24 July 2026 · source ↗
  7. ReportedCapital spending is guided flat, so fibre passings compete with the wireless network for the same dollars, argued on Spending Below Depreciation.
    Verizon fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99 - full-year operating statistics, segment EBITDA, free cash flow 2020-2025 and 2026 guidance - cash flow, capital spending, debt and 2026 guidance. — FY2025 · publ. 30 January 2026 · source ↗
  8. ReportedCapital spending in the first half of 2026 was $8,210 million, and the full-year guide of $16.0 billion to $16.5 billion has to cover both networks.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - cash flow, balance sheet, capital returns and guidance. — Q2 2026 · publ. 24 July 2026 · source ↗
  9. ReportedCapital spending in the first half of 2026 was $8,210 million, and the full-year guide of $16.0 billion to $16.5 billion has to cover both networks.
    Verizon fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99 - full-year operating statistics, segment EBITDA, free cash flow 2020-2025 and 2026 guidance - cash flow, capital spending, debt and 2026 guidance. — FY2025 · publ. 30 January 2026 · source ↗
  10. ReportedThe union contract commits to hiring "A minimum of 500 new technicians" in New York, part of the workforce for the build.
    Communications Workers of America District 1 - summary of the 2026 tentative agreement extending the Verizon contracts to 3 August 2030. — 2026 · publ. 2026 · source ↗
Sources
Generated September 29, 2026