Zorglub
join:2000-11-18
Fremont, CA
| Of course it will be profitable
Over how many years do they depreciate their network? 10, 15, 20 years?
Verizon certainly intends to grab more than 10% of the market, so that math is very short sighted. If Verizon can grab 40% of the market, and I don't why they would not, then the math works out to $2900 per user.
Furthermore, it's the network that will carry Verizon for the next 50 to 100 years. They will definitely take a hit for the next few years, but that's called investing in your own products. |
|
rawgerz
In Debt we trust
Premium
join:2004-10-03
Grove City, PA | Once again..
You HAVE to SPEND money to MAKE money...
Fiber is nothing new, and we're ALL long over due for it |
|
NumberCruncher
@dynamiccity.com
 from:
TKJunkMail 
| A little less
There is a modest error in the calculation above. $950*400 = $380,000 (vs. $360,000) + $650*40 = $406,000 / 40 = $10,150. The math can also be calculated as $950/.10 (10% take rate) + $650 = $10,150.
According to slide 11 of the FIOS presentation referenced above, their 12 month penetration is 15%. Take $950/.15 = $6,333 + 650 = $6,983.
According to the FCC (»hraunfoss.fcc.gov/edocs_public/a···11A1.pdf.) the value of a cable subscriber is $3,785. While one can argue that a FIOS subscriber may be more valuable than a cable subscriber, using this value as a benchmark, Verizon will need to achieve a 30% take rate for its costs to equal the value of a subscriber. ($3,785 - $650 = $3,135. $950/$3,135 = .30) |
|
Fountainhead
Premium
join:2003-10-25
New York, NY
clubs: | reply to rawgerz
Re: Once again..
If they can grab each home for multiple services, the math gets much better than if you just sign up for broadband.
--
It's all part of my rock and roll fantasy |
|
dcs2281
join:2004-09-14
Santa Clarita, CA
2 edits | Reminds of their earlier attempt at FIOS
This reminds me of the GTE/Verizon Americast days. They deployed it, waited 2 years, were lossing their shirts on it, and sold it to the local CableCo's. The excuse was it was to costly to maintain. |
|
neftv
join:2000-10-01
Broomall, PA
 ·Broadvox Direct
| Don't forget
Don't forget Verizon stole I mean was given state (at least from Pennsylvania) money for Fios so it's money that was already there from our pockets from taxes already paid. So some of those costs should be offset. If not then there is problem of honesty within Verizon. |
|
Hangmn
Don't Fight It...It's Inevitable
Premium
join:2000-04-08
Philadelphia, PA
| BULLSHIT
PA RESIDENTS HAVE ALREADY PAID FOR THEIR FIBRE...In tax breaks and inflated bills...these number are skewed because they DO NOT take into account all monies given to these scumbags
--
»davescustompc.com |
|
amenite
The Soylent - It's People
Premium
join:2002-11-21
Ridgewood, NJ
clubs:
 ·Verizon Online DSL
| What about the (yanked) copper?
Isn't there some gain by not having to maintain the copper? Even if it's going away one location at a time? They're pulling it for good when you get your FIOS. What's the cost of maintaining one vs. the other?
--
Time is an abstract concept invented by carbon based life forms to monitor their constant decay.-Thunderclese |
|
rdmiller
join:2005-09-23
Richmond, VA | What about existing DSL users?
If Verizon already has 25% DSL penetration in this neighborhood (picking a number out of my ass, the same way the author of this study did), don't Verizon have a captive audience that is eager to jump to FIOS? Just asking. |
|
doonboggle3
join:2005-09-18
Yerington, NV | reply to Zorglub
Re: Of course it will be profitable
I really don't care what it costs the providers. Being in a non-municipal area, and way 'out in the boonies' ... I'd almost give anything to get a DEPENDABLE and fast internet speed service.
doon |
|
malvado6
I pee on Bushes.
join:2003-09-13
00001
| reply to rdmiller
Fuzzy Math
What ridiculous calculations.
I was the first home out of my CO to be wired for FiOS.
I don't know how many homes were passed at the time the service went available (let's go with the magic 400).
So by this clown's math, my home cost $360,950 to wire.
Whatever. Verizon has only hit the tip of the iceberg on their deployment. |
|
Need BB
join:2001-12-21
Rochester, NY | Copper is at its limits. It is either this or face extinction.
--
AWD Turbo Power |
|
NyQuil Kid
8f The Nyquil Kid
join:2001-01-06
Brick, NJ
 ·Comcast
·Verizon Online DSL
| reply to Zorglub
Re: Of course it will be profitable
This is in many ways how cable was viewed when it was first rolled out. It was costly at first, but 10-20 years later, the cash is rolling in (also keep in mind that cash flow, not net income, is much more important from a financial analysis perspective).
[8F] The NyQuil Kid
--
[8F] The NyQuil Kid comes into town not looking for trouble...n00bz gang up, but he ain't seein' double,...pulls and draws, his deagles two...n00bz litter the ground you know it's true. |
|
CCTVTech
Premium
join:2003-04-23
Phoenix, AZ
clubs:
·Integra Telecom
·Cox HSI
·Qwest.net
 ·GoDaddy Hosting
| No Limit/Restrictions
With fiber Verizon will never have a speed limit (From Verizon To The Customer), plus they can offer tons of different services over that fiber. Copper is old technology that can't handle the speeds of the future, cable says they can provide the bandwidth but that is only for a few more years.
For the people who say no one needs that much bandwidth are the same type of people who said no one needs faster than 56K back in BBS days.
I see a day where I can have 2 HD streams, Transfer a Gig of photos to family, and check the inventory of my fridge from the grocery store all at the same time with bandwidth to spare. |
|
retsam
join:2004-09-02
Red Bank, NJ | gawd, what a stupid thread. lets see, people bitch that america is falling behind in broadband. then when a company actually goes through with a state of the art network those say people bith about the costs!....get a life loosers. |
|
disc
join:2005-12-31
Raleigh, NC
| reply to NumberCruncher
Re: A little less
Good analysis, but I'm wondering if they're two different types of investments. For instance, $3785 represents the purchase price of the business that's being purchased. On one hand, their assetts are being purchased, but what's also being purchased is that they're a business that is generating cash flow. It has other costs such as OPex built into it.
In comparison, VZ's investment represents CAPex per sub, but not OPex, Rev, etc. Would it maybe be better to use the 10 Year NPV of Verizon's business case and divide that across the number of subscribers? Maybe some Year greater than 10? I don't know. It would be interesting to know how the buyout firms actually do this type of calculation. |
|
rhard49
join:2001-04-12
Merrick, NY | Got it
I just got my 9,650.00 installed monday and I'm lovin it!
Goodbye Cable  |
|
Pashune
Inhaling at 675 KB per sec.
Premium
join:2006-04-14
Gautier, MS | reply to retsam
Re: No Limit/Restrictions
Hmm, if you think about it; Those OTHER countries who have better broadband than we do also have better pricing...
Also, do a spellcheck. Thanks. |
|
bent
not broken
Premium
join:2004-10-04
Loveland, CO
clubs:
·Comcast Formerly ..
| reply to Zorglub
Re: Of course it will be profitable
40% might even be conservative, especially in the long run. Let's face it. Copper is going to be obsolete, and Verizon is one of the few companies that can see beyond it's next SEC disclosure.
--
»www.lp.org
"That government is best which governs least" - Thoreau |
|
pepe7
join:2003-08-25
|  reply to Pashune
Re: No Limit/Restrictions
Yes, they do. And did you every consider why this is the case? Well for starters they also have varying forms of government subsidies to fund business development in some cases which we do not. Combine that with a generally smaller area of land to cover, and you can quickly see how their prices could be better for faster service.
-Pedro |
|
