In case you're one of the few folks still on Verizon's DSL service dreaming of upgrades, Verizon has again confirmed that once current franchise build obligations are completed, Verizon will not be expanding their FiOS services any further. Speaking to investors at the Goldman Sachs Communacopia Conference (
conference notes (pdf) via
Stop the Cap), Verizon CFO Fran Shammo said that beyond the current franchise obligations (primarily in major cities like Philly and NYC), there simply won't be a second act to the FiOS saga. Said Shammo:
...the significant build in is at the end of the '14. And an LFA is a licensed franchise agreement area which we've entered into, oh, I guess about eight years ago with each of the states and we have different requirements within each state that we have to pass so many homes within those states and every agreement is different. So that is kind of the way that we look at it and this is not --
we are not passing more than we originally said. We will still end up at around that 18 million to 19 million mark from a pass perspective. And at this point we won't build beyond that, because at this point we have to capitalize on what we have invested.
The city agreements that remain contain plenty of loopholes allowing them to back out of build requirements
if they're not seeing specific TV subscriber uptake metrics. Of interesting note: Verizon has been
hiking FiOS prices and
cutting back on promotions in a major way over the last year, something even Shammo seems to suggest was overkill. Responding to comments that FioS growth was slow in the second quarter:
..we probably pulled back a little bit too much on promotion. I think you are seeing -- even if you see now, you will probably see a little bit more promotion coming out of FiOS. It is that balancing act that we have got to get right.
The entire thing is worth a read for those interested. As for the millions (30-40% of their footprint) still on DSL, Verizon clearly hopes to either
drive those customers to cable through price hikes, or transfer to their fixed wireless LTE service home fusion. That spells trouble for cities in places like Buffalo or Binghamton, which Verizon appears to be unwilling to upgrade -- ever.
