27 September 2006

FiOS Update

Verizon's FiOS is a project that has garnered attention from many sources. Some say that it is too expensive, especially considering that AT&T is choosing a less costly architecture. This report posted today in BusinessWeek reports some project cost estimates and gives some initial market results.

Is this a worthwhile gamble for Verizon? Will they be vindicated, or will the cheaper architectures turn out to be the better choice?

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Jeff said...

To some extent, I don't think that Verizon has a choice. It seems that AT&T's network concept (FTTN / FTTC) is a thing of the past.

Verizon's main concern is the Cable Co's and the traditional market dominance they have on video. A network architecture like AT&T's cannot compete with a Cable Co. in terms of customer desire (greed?) and satisfaction (i.e., being able to provide 100+ standard channels with several on demand channels and data and phone, etc, etc).

There is no concrete evidence to say that Verizon's architecture will win out in the end, but I think that they have the right idea. When you upgrade, do it big and plan for the future. All they can hope is that is pays off in the end.

Pat said...

Given the projection of getting 75k customers for FiOS TV and 600k for FiOS Internet in the next quarter alone, it doesn’t seem too exaggerate to say that about 706k-956k TV customers and 1,568k Internet customers will be subscribed per year on average in the next 4 years.

If as projected, profit will turn to a positive in 3 years. If we assume that people will be demanding bandwidth more and more or at least not less than they currently have, then Verizon’s FiOS should be very enjoyable getting more and more customers coming, both new and switched. This is given the fact that FiOS is much faster and more channels than U-Verse (if you meant AT&T’s to be).

Though it is quite obvious that their account will not be in the red, it is hard to say if they will be able to dominate the market; this should depend on a lot more factors including uncertainty in technology and governed regulations.

[numbers derived from the pointed article]