mobbo
join:2005-04-13
Denton, TX | Profitable? How can Verizon make a profit by offering so much bandwidth to customers? Bandwidth is expensive, so how can they offer 50Mbps in the future and expect to make a profit? Even if the price is $200 - $250/month, someone using up 50Mbps and, say, 20 - 25Mbps upstream would eat up that revenue quick.
Just curious. I am about to move to a location that gets FiOS and I want the 15/15 package and I intend to use all of it. Would they cut me off if I became unprofitable? |
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 darciliciousCyber LibrarianPremium
join:2001-01-02
Forest Grove, OR
kudos:1
 ·Frontier FiOS
| said by mobbo:Just curious. I am about to move to a location that gets FiOS and I want the 15/15 package and I intend to use all of it. Would they cut me off if I became unprofitable? As always, it's a numbers game. Verizon (like any provider) is counting on the fact that not all of its customers will use all available bandwidth all the time (regardless of the marketing hype in this article). While Verizon's expanding capacity is probably better than most, it's not infinite.
However, having said all that, not a single Verizon customer has ever reported here that Verizon cut them off because of excessive bandwidth usage. |
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 a333A hot cup of integrals please
join:2007-06-12
Rego Park, NY
 ·Cingular Wireless
| reply to mobbo
it's partly due to the fact that VZ and many other baby bells have extensive fiber backbone networks of their own. Verizon, for example, has a Tier 1 network, which means they have free peering to pretty much any other Tier 1 backbone on the net. Also, they make money charging others for transit over THEIR backbone, which helps cover part of their costs. |
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rebus9
join:2002-03-26
Tampa Bay Reviews:
 ·RoadRunner Cable
·Verizon FiOS
1 edit | reply to mobbo
said by mobbo:How can Verizon make a profit by offering so much bandwidth to customers? Bandwidth is expensive, Not as expensive as the telcos WANT you to think. Late last year VZ conducted a field test, dropping a 100 Gbps line card at both ends of existing 10 Gbps fiber, with no other changes to the physical path.
»newscenter.verizon.com/press-rel···lly.html
The result-- success-- thereby proving that even with current technology, they can upgrade current 10 Gbps (OC-192) circuits by an order of magnitude (factor of 10) simply by replacing the cards that terminate the fiber.
Sure those cards are expensive today, but over the serviceable life of a long-haul link, it's a nominal one-time cost when compared to the other expenses which go into maintaining the circuits (routing gear, power, salaries, etc) and the fiber itself. |
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 lovswr
join:2001-09-15
Smyrna, GA | To add to this. 3 years ago, VBI was offering my company 184 Oc-3's for less than 1,000 USD per month per port for 24 months. We passed on the deal & we also got a good discount for (potentially) buying so much B/W at one time, but the point remains the same.
Just getting bits from here to there, quickly, is very cheap. Access on the other hand...
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lovswr = good hivswr = bad |
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rebus9
join:2002-03-26
Tampa Bay Reviews:
·RoadRunner Cable
·Verizon FiOS
| said by lovswr:To add to this. 3 years ago, VBI was offering my company 184 Oc-3's for less than 1,000 USD per month per port for 24 months. 1,000 USD just for the ports, or ports + transit?
With transit, that price would even make Cogent dizzy. I've never found VZ (which was once MCI, and UUnet before that) to be all that competitive, even at the Gig-E level, compared to other tier 1's like SAVVIS and Level3. |
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 C0deZer0Oc'D To Rhythm And PolicePremium
join:2001-10-03
Davenport, FL | reply to mobbo
Have you considered that this is equipment they expect to have around for the long run?
Don't see why more ISPs can't do that. |
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 dvd536as Mr. Pink as they comePremium
join:2001-04-27
Phoenix, AZ
kudos:4 | reply to mobbo
said by mobbo:How can Verizon make a profit by offering so much bandwidth to customers? Bandwidth is expensive, so how can they offer 50Mbps in the future and expect to make a profit? Even if the price is $200 - $250/month, someone using up 50Mbps and, say, 20 - 25Mbps upstream would eat up that revenue quick. Bandwidth isn't as expensive as everyone makes out and for every joe hog theres 10 ginny grandmas checking email
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When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee |
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