Tuesday, March 30, 2010

Will Verizon Finally Announce a Fiber To The Node Product?

The New York Times ran an Associated Press article a few days ago titled Verizon winds down expensive FiOS expansion. Here's a couple of interesting quotes from the piece:

.... Verizon is nearing the end of its program to replace copper phone lines with optical fibers that provide much higher Internet speeds and TV service. Its focus is now on completing the network in the communities where it's already secured ''franchises,'' the rights to sell TV service that rivals cable, said spokeswoman Heather Wilner.

That means Verizon will continue to pull fiber to homes in Washington, D.C., New York City and Philadelphia -- projects that will take years to complete -- but leaves such major cities as Baltimore and downtown Boston without FiOS.

Here's more:

Verizon doesn't appear to have ruled out further FiOS expansion, but doesn't have any plans, either. The economics apparently are not attractive enough: TV service carries fairly low margins compared to Verizon's phone business, according to analyst Craig Moffett at Sanford Bernstein.

And some more:

The recruitment of new FiOS TV subscribers slowed last year. In the fourth quarter, it added 153,000 subscribers, little more than half of the number it added in the same period the year before.

At the end of last year, Verizon had 2.86 million FiOS TV subscribers and 3.43 million FiOS Internet subscribers (most households take both).

Wiring a neighborhood for FiOS costs Verizon about $750 per home. Actually connecting a home to the network costs another $600.

The total cost from 2004 to 2010 was budgeted at $23 billion by Verizon.

In 2004 FiOS seemed like a smart technical decision for Verizon. At the time AT&T was trialing a Fiber To The Node (FTTN) product (now called U-verse) and were having technical difficulties getting it to work. Over the past few years though FTTN bugs have been worked out and both AT&T and Qwest have launched successful implementations.

Back in late 2008 I posted the following question in a blog post Will Verizon Offer A Fiber To The Node Product In 2009?. I stuck my neck out then and said Verizon would in 2009. I was wrong then but I'm thinking I may have missed it by a year. So....... I'm now predicting Verizon will be offering a FTTN product sometime in 2010.

The only other competitive option the company has right now to get into areas not already served by FiOS is 4G LTE (Long Term Evolution) wireless service based. This could bypass land-line delivery completely....... but....... can LTE handle the load?

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