Verizon, by institutional culture, is a very cautious, conservative company. The deployments have been very slow and far too deliberative. Its as though they don't even believe in what they're doing anymore (connecting the world, bringing in the next generation, blah blah).
On the other hand, if they've exhausted their initial $23 billion capital expenditure for the network rollout, it makes sense that they'd have to slow down. Verizon's revenues aren't an unlimited ATM for the FIOS people to draw from. Its just as likely that they want to start MAKING MONEY off of these areas where theyve laid down the fiber. Then, when they start to recoup some of their investment they can begin diverting this cash flow into further expansions with more confidence. Lets be honest. We all know that these guys face HUGE up-front costs. The money has to come from somewhere, and for crying out loud, they just spent $23 billion! The recession only increases all the factors that would make them want to wait. This seems much more like a strategic pause, a chance to breathe a little, build up some more capital, and evaluate how the current roll-out is doing, before another flurry of activity (probably once the recession ends.)
I really think that the point of Fios isn't short term ROI. It's a ROI for the next 100 years! Hopefully Verizon doesn't expect to get all that they've put in back after only a few short years. Wireless isn't going to ever carry as much bandwidth as wired, so, Verizon, don't put all of your eggs in that basket...
You're right that the point isn't short-term ROI, they'd fail if that's the case. But that only bolsters my point that they don't have unlimited capital to keep laying down mile after mile of fiber. Especially in this economy, with a significant flight to safety, capital for hugely expensive projects like FIOS has got to be hard to come by, and Verizon is probably just pausing to shore up their position in that regard.
|reply to Mattxdc |
You do realize they`re still making billions in profits despite the rollout of FIOS and LTE, right?
They don`t have a capital shortage.
tim_kButtons, Bows, Beamer, Shadow, KaseyPremium,VIP
|reply to jjeffeory | said by jjeffeory:
I really think that the point of Fios isn't short term ROI. It's a ROI for the next 100 years!
The executives want their fat bonuses and need the bottom line to look better. With the moves they're making it appears to me they are thinking short term.--
RIP my babies Buttons 1/15/94-2/9/07, Beamer 7/24/08, & Bows 12/17/94-10/11/09