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Nightfall
My Goal Is To Deny Yours
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join:2001-08-03
Grand Rapids, MI
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reply to elefante72

Re: Just a drop in the bucket

said by elefante72:

I read Google fibre is about $600 per POP. So I would put Verizon somewhere in the $800 per POP range circa 2014. Maybe someone from Verizon can chime in, but that is what I am seeing at broadcast locations today... Fibre is actually cheaper than copper now, physically and will continue to be.

Do you have a link or source to back this up?

Back in 2011, a profitability study was done on FIOS and found it to be much more.

»www.businessweek.com/magazine/co ··· 9606.htm

quote:
Frontier's proposed pricing moves suggest to Craig Moffett, a telecom analyst with Sanford C. Bernstein (AB), that FiOS does not turn a profit for Verizon, either. Moffett says his view is reinforced by Verizon's announcement in 2010 that it would effectively freeze its FiOS footprint. "It was a tacit admission that building new networks is a losing proposition," he says. "Frontier is saying that even operating them after they're built might not be worth it." He estimates the project will end up having cost Verizon $4,000 per connected home. Moffett calculates the present value of acquired subscribers at $3,200 each.

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sonicmerlin

join:2009-05-24
Cleveland, OH
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The cost of $4000 is per "connected home", meaning you have to consider uptake rate. The higher the uptake rate, the lower the cost. But cost per any home, connected or not, should be in the very low 1000's.


Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
kudos:1
Reviews:
·ooma
·Comcast
·Callcentric
said by sonicmerlin:

The cost of $4000 is per "connected home", meaning you have to consider uptake rate. The higher the uptake rate, the lower the cost. But cost per any home, connected or not, should be in the very low 1000's.

I guess I don't understand the uptake rate that you are talking about. I will do some searching on it. Do you have a link that may explain it for me?

Also, does the uptake rate also take into account other connectivity such as copper or cable?
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sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
Meaning if an ISP builds out fiber to 10 homes, but only 2 of them take up the service, then their uptake rate is 1/5 or 20%. So the cost of building out fiber to ten homes is spread out to only 2 paying households. So if it cost $1000 per home, it would be $10000 for all 10 homes, divided by 2 and you get $5000 per home.


Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
kudos:1
Reviews:
·ooma
·Comcast
·Callcentric
said by sonicmerlin:

Meaning if an ISP builds out fiber to 10 homes, but only 2 of them take up the service, then their uptake rate is 1/5 or 20%. So the cost of building out fiber to ten homes is spread out to only 2 paying households. So if it cost $1000 per home, it would be $10000 for all 10 homes, divided by 2 and you get $5000 per home.

All signs point to FIOS not being profitable unless the customer is buying services for a period of 2.5-3 years. I hear you on the uptake rate, and it sounds plausible. At the same time though, it sounds pretty low. Even lower than FIOS estimates or the experts estimate.

So while I do agree that the uptake rate should go down depending on the amount of houses in an area that purchase the service, I don't think it goes down that much.
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