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So Far, Verizon's $23 Billion FiOS 'Gamble' Paying Off
Executives laugh off all the telecom haters...

Sure, Verizon (particularly their lobbyists and lawyers) have done some dumb things, but it's hard to argue that upgrading to last mile fiber is one of them. Well, unless you're a stock analyst that thinks substantive network upgrades are stupid, or you just really hate speed. But generally, it's agreed upon that trying to pass yourself off as a next-generation broadband company while milking last generation copper only fools some of the people, some of the time. Verizon's quarterly earnings yesterday showed a decline in DSL and landline customers, but were buoyed by both FiOS and wireless. The earnings left Verizon executives feeling a little frisky, after so many in the industry argued that their $23 billion investment in residential fiber wasn't worth the money:

quote:
“FiOS continues to show good subscriber growth, deeper penetration and growing ARPUs,” Strigl said. “We have more than doubled our video subscribers to 1.6 million and increased penetration about 500 basis points. For the quarter, we had 233,000 net ads and opened 1.2 million additional homes for sale in the quarter. Despite the rhetoric of cable companies and their advocates, FiOS is a growing formidable competitor. In three months, we reached 10% penetration in Staten Island.”
Another recent good bit of news for Verizon was their new franchise agreement in New York City and their pending agreement with Washington DC. Those agreements, mixed with their use of Corning's bendable fiber, should help them quickly wire MDUs and apartment complexes. The numbers boost over the next few quarters may help them offset losses from a tightening economy and struggling consumer confidence.

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Xure
join:2003-11-14
Beverly Hills, CA

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Xure

Member

Why are people surprised by the obvious?

Wow! They did something right and they get results! Outrageous!

What they should have done is nothing and spend money on lobbyists, corporate retreats and PR (not that they have not already) and hope for the best.
88615298 (banned)
join:2004-07-28
West Tenness

1 recommendation

88615298 (banned)

Member

Re: Whyu are people surprised by the obvious?

I'mnot. Unlike cable and telcos verizon looked at the LONG term future isntead of short term and it's paying off. In the long run at&t is going to have to go FTTH and inthe long run they will be spending MORE than what Verizon has spent. In 10-12 when they finally realize they have to go FTTH they'll have to pay those workers 40%-50% per hour more to do the work than they would if they would have done it NOW.

MrMaster
Rum Connoisseur
Premium Member
join:2000-12-16
St Thomas, VI

MrMaster

Premium Member

Re: Whyu are people surprised by the obvious?

said by 88615298:

I'mnot. Unlike cable and telcos verizon looked at the LONG term future isntead of short term and it's paying off. In the long run at&t is going to have to go FTTH and inthe long run they will be spending MORE than what Verizon has spent. In 10-12 when they finally realize they have to go FTTH they'll have to pay those workers 40%-50% per hour more to do the work than they would if they would have done it NOW.
Not necessarily true and also don't forget that technology continues to decrease in price.

I hate AT&T and wished they did FTTH as I am not in VZW area.
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned)

Member

Re: Whyu are people surprised by the obvious?

said by MrMaster:

said by 88615298:

I'mnot. Unlike cable and telcos verizon looked at the LONG term future isntead of short term and it's paying off. In the long run at&t is going to have to go FTTH and inthe long run they will be spending MORE than what Verizon has spent. In 10-12 when they finally realize they have to go FTTH they'll have to pay those workers 40%-50% per hour more to do the work than they would if they would have done it NOW.
Not necessarily true and also don't forget that technology continues to decrease in price.
So what you are saying that at&t pays it's workers the same wages they paid them in 1996? I think not.

MrMaster
Rum Connoisseur
Premium Member
join:2000-12-16
St Thomas, VI

MrMaster

Premium Member

Re: Whyu are people surprised by the obvious?

said by 88615298:

said by MrMaster:

said by 88615298:

I'mnot. Unlike cable and telcos verizon looked at the LONG term future isntead of short term and it's paying off. In the long run at&t is going to have to go FTTH and inthe long run they will be spending MORE than what Verizon has spent. In 10-12 when they finally realize they have to go FTTH they'll have to pay those workers 40%-50% per hour more to do the work than they would if they would have done it NOW.
Not necessarily true and also don't forget that technology continues to decrease in price.
So what you are saying that at&t pays it's workers the same wages they paid them in 1996? I think not.
Actually, they would be paying less. Wage increases have not kept up with inflation, therefore, yes AT&T is paying less to their employees.
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

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fiberguy2 to MrMaster

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to MrMaster
Actually, while people think at&t are fools, they're actually pretty smart. While people think Comcast should go fiber to the home (and cable in general) they are actually smart. The unfortunate losers, to some degree, ARE Verizon & their stockholders.

Verizon's build out will in fact help drop the price of fiber further. Now that there is a major player, they will spur the cheaper prices of the product to deploy meanwhile letting at&t wait for the drops.

at&t is currently pushing fiber closer at a lower cost, milking the copper, yet, but delivering a good service to the customers will buy. Do I like it really? eh.. U-Verse is not for me. However, Verizon will soon get complacent with FiOS in a while and slow on the innovations. Meanwhile, at&t is continuing to enhance their U-verse offerings which will ultimately advance even further when push fiber to the home, at a cheaper price. Same with cable - who yes.. sooner or later will push fiber to the home; its bound to happen.

Verizon, while having an advanced network, will actually still be using the older gear by the time at&t and cable can come in and deploy the newer, cheaper priced gear with a better instant return over Verizon.

Is Verizon a pioneer? not really.. they are ONE of the players in the pioneer gang as Fiber has been deployed in other areas, albeit smaller deployments, as far as 1999. (WinFirst now Surewest, Huxley Communications, and other regionals and smaller systems.)

There really are not true winners and losers in this game - not yet at least - and to be honest, there never will be a 'clear winner' because, contrary to popular believe around here, it's not all about the kind of cable used to connect you to the network.. its MUCH greater than fiber or coax.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Re: Whyu are people surprised by the obvious?

You are incorrect in your overall point.

Verizon is paying more than AT&T will, but they also get to depreciate that capital and write it down which comes off their bottom line. So the overall true cost they spend on it won't be much greater than anyone else AND they will have the benefit of being state of the art which the other players will not be for quite some time.

A fiber network simply can't be touched by copper when it comes down to it and Verizon will be able to "compete" with anyone on anything at the drop of a hat.

dfhfdh
@gci.com

dfhfdh

Anon

Re: Whyu are people surprised by the obvious?

said by Skippy25:

You are incorrect in your overall point.

Verizon is paying more than AT&T will, but they also get to depreciate that capital and write it down which comes off their bottom line. So the overall true cost they spend on it won't be much greater than anyone else AND they will have the benefit of being state of the art which the other players will not be for quite some time.

A fiber network simply can't be touched by copper when it comes down to it and Verizon will be able to "compete" with anyone on anything at the drop of a hat.
Sounds like somebody needs to take an accounting 101 class so they can understand the talking points they heard on cnbc
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

fiberguy2 to Skippy25

Premium Member

to Skippy25
I am far from incorrect in my overall point.

One thing you did was, first off, not apply accounting correctly.. sorry.. and two, here we are again with bragging rights. MAYBE here, Fiber will win, however, outside the BBR lab/world, and in the real life situation, many people REALLY don't care about Fiber, Coax, Copper, or carrier pigeon.

Tell me.. in the economy, do you think anyone cares about "state of the art" when they make a choice from one provider over another? Price, loyalty and our good friend VALUE will win out. This economy will continue this way for at LEAST 2 more years, if not more.. AND, we will be getting a bit worse before better. We've yet to get to the Christmas season where most retailers pick up some of their largest sales of the year. Can't wait for the report early 2009 to see where businesses are and how THAT will affect "consumer confidence" as well.

Fiber/copper.. you're on the wrong points here.

Don't quit your day job, AND.. unless you are in the business or play in this kinda stuff in the big arena, be VERY careful who you flat out say is wrong.. Like the other poster said,... talking points.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Re: Whyu are people surprised by the obvious?

I am not speaking of consumers and the state of the art. They truly can care less whether they get their reliable 50mbs from fiber or pigeon. I am speaking from a business perspective and the future it brings them.

And you coward anon poster...... I certainly am not an accountant, but I do own a business and I do know that qualifying expenses are charged against revenue. Capital expenses such as these are qualifying expenses and would certainly be charged against any revenue. Short term yes, it appears to cost more and for the stock jockeys they don't like it. But long term it is a wash especially considering the over all business benefits it brings in other cost savings that also effect the current bottom line and the long term bottom line. Grow some and go look at any company’s public financials and you will see just this.

Copper can't touch fiber, PERIOD. You saying otherwise is just silly, but thanks for the warning of your vast superiority.
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

fiberguy2

Premium Member

Re: Whyu are people surprised by the obvious?

lol - chill out.. you may make your business work if you take a breath. Besides, it's now about what YOU are talking about.. you responded to a post and didn't even respond on topic... but I guess what ever works for you.

Who said anything about the superiority of fiber over cable? Again, you're off in left field. Reading is fundamental there bro.

And, running a "business" vs an S corp and being an accountant or CPA are TOTALLY different things.

Leave it there.. trust me.. leave it there.

floridaguy
@cox.net

floridaguy to Skippy25

Anon

to Skippy25
I do have knowledge of accounting.... but this is not relevant.

What is relevant is return on investment, learning curves, material costs, labor costs, and customer sensitivity to broadband offerings.

Lets not forget a dollar spent today is worth more than a dollar spent tomorrow.

VideoGuy
@verizon.net

VideoGuy

Anon

Re: Whyu are people surprised by the obvious?

EXACTLY.

Although depreciation is a nice tax shield, it does not change the free cash flow reality and that is what puts Benjamins in the bank.

That said, though VZ may pay more for equipment as the first mover, they get to set the standards with vendors and they will likely more than make up for the incremental costs in the extra cash flow they earn from all the customer months of revenue they get from the day they started to the day some other player starts.

THAT SAID...
I don't love VZ - but you have to give them credit for placing a very large bet while still on top to ensure survival over the long haul. And they did it as a public company without having a shareholder revolt. Ivan deserves his compensation plan, whatever it is.

In spite of what Comcast said on their earnings call about AT&T, what keeps cable guys up at night is FTTP/H and the FiOS TV user guide and FiOS internet speeds. Put FiOS TV content, DVR control and FiOS e-mail on the Verizon Wireless phones and it gets really, really scary.

The next five years will be the most fun we've had so far in video/data/voice/platform integration.
axus
join:2001-06-18
Washington, DC

axus to fiberguy2

Member

to fiberguy2
Umm, AT&T had better hope that their DSL upgrades can compete with Docsis 3.0, or Comcast will eat their lunch. If there were actually landline competition between Verizon and AT&T, I think Verizon would be winning.

cdru
Go Colts
MVM
join:2003-05-14
Fort Wayne, IN

cdru to fiberguy2

MVM

to fiberguy2
I don't disagree with you per se, but you make a lot of presumptions that may or may not work out in the end.
said by fiberguy2:

Verizon's build out will in fact help drop the price of fiber further. Now that there is a major player, they will spur the cheaper prices of the product to deploy meanwhile letting at&t wait for the drops.
That can be said about any newer technology. FTTH wasn't completely new when Verizon started. Fiber optics wasn't just invented. The most expensive single component of the FiOS buildout isn't the fiber, or the boxes on either end of the fiber, it's the labor to get it to the house. Ignoring inflation/cost of living differences, the labor rates to the a cable today isn't going to change that much from a few years or a decade from now. It's still going to take just as much effort.

The cost of equipment likely will drop over time. So VZ does pay a premium for being an early adopter. However as time moves on, their costs for new installs also decreases so it's not as if they can't take advantage of the lower costs too.

On the flip side, as U-Verse continues onwards, AT&T continues to make significant capital expenditures on equipment that will become obsolete if/when they switch to FTTH. They get the lower costs of equipment in the future, but you must add existing equipment costs to the equation today if you want to compare apples to apples, so to speak.
at&t is currently pushing fiber closer at a lower cost, milking the copper, yet, but delivering a good service to the customers will buy. Do I like it really? eh.. U-Verse is not for me. However, Verizon will soon get complacent with FiOS in a while and slow on the innovations. Meanwhile, at&t is continuing to enhance their U-verse offerings which will ultimately advance even further when push fiber to the home, at a cheaper price. Same with cable - who yes.. sooner or later will push fiber to the home; its bound to happen.
Can you cite one specific example where AT&T is innovative and Verizon has become complacent? Stating that is a big presumption on your part.

I don't have U-Verse but I do have FIOS. And just comparing the two currently they look similar in many regards. One or the other may offer a neat add-on feature for convenience, but their core functionality is similar.

The technology is different between the two. U-Verse is IPTV while Verizon is currently RF-overlay for anything non-VOD. Both have their advantages and disadvanges and neither are necessarily "better" then the other. U-Verse uses less bandwidth but becomes limited with how many streams a house can use simultaneously. It's advantageous for a situation where bandwidth is limited, as it is with VDSL. Verizon broadcasts all channels simultaneously as it has the bandwidth to do so. In the future Verizon could switch to a pure IPTV solution but it's not currently necessary.
Verizon, while having an advanced network, will actually still be using the older gear by the time at&t and cable can come in and deploy the newer, cheaper priced gear with a better instant return over Verizon.
Again, your making the presumption that the older gear in some way is not as serviceable as newer gear. Verizon's currently deploying GPON ONTs I believe. GPON likely will be the "standard" for some time so as long as there is a coax port, a telephone port, and a ethernet port, a brand spanking new ONT isn't going to be particularly advantageous then an older GPON ONT. OLTs, receivers, routers, etc all also can be upgraded over time as needed.

And even if Verizon's equipment lifespan does put them at some type of a competitive disadvantage over companies that waited to deploy FTTP, when Verizon upgrades they can leap frog those that were ahead of them with the then latest equipment.

So the only real advantage those that wait have is that prices for equipment may be lower. But a company can't always wait as there is always going to be something better/more expensive, and waiting too long can cost you customers or a competitive advantage.
Is Verizon a pioneer? not really.. they are ONE of the players in the pioneer gang as Fiber has been deployed in other areas, albeit smaller deployments, as far as 1999. (WinFirst now Surewest, Huxley Communications, and other regionals and smaller systems.)
That's like saying settlers that moved across the country several hundred years ago weren't pioneers because Native Americans were already around prior. Sure Verizon is pioneers as they are the first US-based major communications company to deploy a pure fiber network over a large footprint.
There really are not true winners and losers in this game - not yet at least - and to be honest, there never will be a 'clear winner' because, contrary to popular believe around here, it's not all about the kind of cable used to connect you to the network.. its MUCH greater than fiber or coax.
I definitely agree with this. FiOS, U-Verse, and a HFC cableco are just three different ways to accomplish the same thing. All have their advantages and disadvantages. FiOS definitely has the greater upfront costs, but to the long term investor has a lower cost of ownership. U-Verse and the HFC network may make the short term investor happier and is less risky due to it's lower investment costs, but obviously has it's limitations and is only a stop gap measure to get by until they can go with a true FTTP solution
jca2050
Premium Member
join:2002-02-04
Dallas, TX

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jca2050 to MrMaster

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to MrMaster
The xDSL technology is already nearly stretched to the virtual limit, there really is no cheap way around it. As DOCSIS 3.0 becomes more mature and developed, the companies that are still stuck providing xDSL services won't be able to keep up with cable and fiber. They are already getting left behind. What happens when both (cable and FiOS) providers are offering a 50mb downstream for under $70 a month? That's not very far off. Of course FiOS will have the advantage with being able to offer an outrageous upstream to go with it.

I can see DSL being the new dial-up in the near future, while it's a good alternative for areas without good cable and FiOS availability, that will shrink has cable companies and Verizon work to expand their footprint throughout the US.
Xure
join:2003-11-14
Beverly Hills, CA

Xure to 88615298

Member

to 88615298
I was sarcastic. Of course offering superior product will be successful.
joeMI
join:2006-08-15
Mcmillan, MI

joeMI to Xure

Member

to Xure

Re: Why are people surprised by the obvious?

Because for the last decade or so, we haven't had any visionaries or long-term investment.

IMO, most executives are focused on short-term stock prices to pad their wallets with stock options and bonuses.

If the others don't get on the ball, Verizon will be THE infrastructure company of the future where all communications (TV, phone, internet, etc.) will be on their pure fiber optic backbone. No other technology that I know of will be able to feed American's need for high speed surfing by one or more family members while other family members are watching two or more HD programs and recording a third.

THANK YOU VERIZON. And, when will you get fiber to my house? And, please don't forget about rural Americans.
jazzmess
join:2007-03-02
Irving, TX

jazzmess to Xure

Member

to Xure
Hmm, well I work at Verizon, in Fios. And while I always believed in Verizon's vision for Fios, I did worry that the hassle of the installs would dampen people's desire to have the service. SO MANY TIMES I get calls from people upset about the time the installs take, the fact that their yards get dug up, the fact that a unit has to be put on the outside of their homes ("uglifying" it), and on and on and on. "I never had these problems when I had cable!" is the perennial cry. And of course, I try to explain that Cable has been around for years, and Fios is new, and so new equipment must be installed, fiber must be laid, etc. - then people accuse us of making our customers beta testers.

Of course I am definitely glad that these complaints are not stopping people from still getting service (and that I can still keep my job, woo!). I'm just saying I see why it was a gamble to begin with.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Others?!?!?

Now if the others would pull their heads out of the sand *cough* AT&T *cough* and start doing some real upgrades...

I am glad they are doing well with this and I look forward to them finishing their foot print and then hopefully moving into other's to compete with them.

I also hope that the regulators see these massive profits they are earning and FORCE them to start delivering these products to rural communities after they have a large percentage of their "metros" covered.
cornelius785
join:2006-10-26
Worcester, MA

cornelius785

Member

Re: Others?!?!?

i don't think a company should be forced to provide a LUXURY of fiber internet access to rural places. the absolute last thing anyone should want to see is the company deploying fiber go bankrupt.

also, got some proof on these 'massive profits'?

NetAdmin1
CCNA
join:2008-05-22

NetAdmin1

Member

Re: Others?!?!?

said by cornelius785:

also, got some proof on these 'massive profits'?
Quarterly and annual statements from ATT. Look them up.

danclan
join:2005-11-01
Midlothian, VA

danclan to cornelius785

Member

to cornelius785
said by cornelius785:

i don't think a company should be forced to provide a LUXURY of fiber internet access to rural places. the absolute last thing anyone should want to see is the company deploying fiber go bankrupt.

also, got some proof on these 'massive profits'?
even when deploying fiber will save them millions in power and maintenance...rural homes can benefit the most from a fiber infrastructure, fewer repeaters, less degradation & distortion, less power, less hardware, less maintenance longer distances etc.

The price of fiber continues to fall as production increases making it nearly on par with copper as the cost of copper (the metal) continues to rise.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25 to cornelius785

Member

to cornelius785
OH, you mean like the "luxury" of electric, gas, water. Those kinds of "minor" things?

Do a little fact checking on the big players and see how much profit they make. I think Verizon Wireless/Broadband just posted $1.6 billion profit this quarter on $24 billion revenues.

It's public info for a publicly traded company. Surely you could find it to prove me otherwise if you are so inclined.

dzfdgf
@gci.com

dzfdgf

Anon

Re: Others?!?!?

said by Skippy25:

OH, you mean like the "luxury" of electric, gas, water. Those kinds of "minor" things?

Do a little fact checking on the big players and see how much profit they make. I think Verizon Wireless/Broadband just posted $1.6 billion profit this quarter on $24 billion revenues.

It's public info for a publicly traded company. Surely you could find it to prove me otherwise if you are so inclined.
Gee it's skippy agian with ridiculous financial claims. While those numbers are probably true it's obvious you don't understand what they mean and you have very little financial knowledge. You really shouldn't be commenting on this topic. You are making yourself look like a fool.
axus
join:2001-06-18
Washington, DC

axus

Member

Re: Others?!?!?

What he's saying is pretty clear to me

xdvdxvxdv
@gci.com

xdvdxvxdv

Anon

Re: Others?!?!?

said by axus:

What he's saying is pretty clear to me
What he said is meaningless. Those numbers are MEANINGLESS without context. And with the size of Cocmast those numbers are nothing to brag about.
Pv8man
join:2008-07-24
Hammond, IN

Pv8man

Member

fastest pipe in the land

Really? Verizons almost limitless bandwith fiber optic network is paying off???

But all those other telcoms told us fiber optic is a waste of money, LOL....karma
Automate
join:2001-06-26
Atlanta, GA

Automate

Member

The jury is still out

If the economy continues to tank it may be hard to recover that $23 billion from consumers that can't afford the services.

Despite what all the "experts" on this site say, AT&T's cheaper U-verse strategy matched FiOS additions for the first time this quarter despite getting started over a year later than Verizon.
Ahrenl
join:2004-10-26
North Andover, MA

Ahrenl

Member

Re: The jury is still out

I save money on a superior service with Fios over Comcast. The bad economy just gave me one more push to switch.
flyingjoey
join:2005-11-07
Jersey City, NJ

flyingjoey to Automate

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to Automate
Actually, in case you haven't noticed, FIOS is being deployed to "Nicer" areas where most households have 2 incomes and whose residents meet a certain income demographic.

I'm in Jersey City and I have had FIOS available just over a year. I buddy of mine lives in a "different" part of Jersey City, FIOS is not scheduled to appear there any time soon.

I'm sure VZ's revenue can almost be guaranteed.

••••••

Xela18954
join:2000-10-06
Richboro, PA

Xela18954 to Automate

Member

to Automate
said by Automate:

If the economy continues to tank it may be hard to recover that $23 billion from consumers that can't afford the services.

Despite what all the "experts" on this site say, AT&T's cheaper U-verse strategy matched FiOS additions for the first time this quarter despite getting started over a year later than Verizon.
The reason AT&T U-Verse is doing OK is not because its on par with FIOS but because in AT&T areas people hate their incumbent cable companies more and given opportunity to switch do so.
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

fiberguy2

Premium Member

Re: The jury is still out

said by Xela18954:

said by Automate:

If the economy continues to tank it may be hard to recover that $23 billion from consumers that can't afford the services.

Despite what all the "experts" on this site say, AT&T's cheaper U-verse strategy matched FiOS additions for the first time this quarter despite getting started over a year later than Verizon.
The reason AT&T U-Verse is doing OK is not because its on par with FIOS but because in AT&T areas people hate their incumbent cable companies more and given opportunity to switch do so.
I think that is a PART of the reason, but no where near the 'why' of it all.

Satellite has been around for years now.. the easiest way to figure that one out is to look at the number of U-verse installations that are apartments vs homes as apartments have a harder time getting satellite services.

Other wise, it's bundling savings, new services, intro offers, rebates.. good marketing.. etc.

Also, don't forget how many people have left the birds for U-verse too. Sooner or later, something ELSE will come in and U-verse, too, will lose customers to that OR, they're piss of their customers and they'll get dropped just as quick.

You guys all need to stop thinking everything is so one issue and simple.. consumer habits are very complex and no two people always do it for the same exact reason.. the other saying is that "your reason is not THE reason"... and many people believe it is.

anonymous900
@comcast.net

anonymous900 to Automate

Anon

to Automate
said by Automate:

If the economy continues to tank it may be hard to recover that $23 billion from consumers that can't afford the services.

Despite what all the "experts" on this site say, AT&T's cheaper U-verse strategy matched FiOS additions for the first time this quarter despite getting started over a year later than Verizon.
Most Americans will drop their cell phones before they drop the Internet. At least most young people would since I know them and am one of them. I do not know about the old, but I can't see many people dropping their HSI Internet service. Downgrade to a slightly cheaper one? Maybe? Disconnect it or completely drop it? VERY UNLIKELY.

Sure most won't be buying FIOS 50Mbps speeds or higher in the current "crisis" in the economy which for me has not really been felt and I'm on the poor side of the income bracket. I do however, doubt that FIOS customers won't keep on growing. People may be opting for the cheaper packages but I don't think Verizon will be struggling in the HSI customers area.
Tested
join:2008-01-19
Plano, TX

Tested

Member

A little number crunching

Let's assume that Verizon gets about $100 per month from each of those 1.6 million video subscribers. That would include added Fios services like home phone and internet for many. I know some will pay way more than $100 for all that and others will pay way less. I just think $100 is a good average Fios bill.

At 1.6 million subscribers they're getting $160 million a month in revenue. That's $1.92 billion a year. I don't know what it costs to run the Fios service each year, but it's not hard to see how they'll recoup that $23 billion in a few years if they continue to have good subscriber growth.
cornelius785
join:2006-10-26
Worcester, MA

cornelius785

Member

Re: A little number crunching

without knowing the true cost of deployment, maintaining the network, tv channel fees to the networks, knowing how a business internally works,and probably others, you can't really take a guess on how soon the $23 billion will be covered.
JPL
Premium Member
join:2007-04-04
Downingtown, PA

JPL

Premium Member

Re: A little number crunching

One little aspect that people are ignoring in all this - maintenance costs. Not only does fiber require less power (the electrical signal for their service comes from your home, e.g.), but fiber doesn't break down. Copper does. Things like weather, water, and atmospheric interference don't affect fiber - they do affect copper (I've seen pictures of Verizon fiber submerged in a foot of water because some worker forgot to fully reinstall the cover on one of their underground boxes - to no ill effect). About the only bad thing you can do to fiber is break it - which becomes harder to do with the bendable variety. I forget the timeline of this (2010 sticks out in my mind, but I could be wrong on that), but Verizon is hoping to save over a $1billion/year in maitenance costs just by having fiber rolled out in place of copper. It's a number so large that I couldn't get my head around it.

alchav
join:2002-05-17
Saint George, UT

alchav

Member

Now everybody is on the Verizon BandWagon!

I told you guys this when Verizon first came out with FiOS, that Fiber was the way of the Future. AT&T made the wrong decision, but that's what happens when you have Bean Counter BellHeads. Verizon is all set up to leave everyone else in the Dust!
decifal7
join:2007-03-10
Bon Aqua, TN

decifal7

Member

Re: Now everybody is on the Verizon BandWagon!

i'm glad verizon is doing good with their choice... ATT's plan of using copper to what seems to be indefinately, and lack of expansions just isn't going to cutt it... I hope Verizon eventually expands to TN, i'll hop on board in a second and never look back

Xela18954
join:2000-10-06
Richboro, PA

Xela18954 to alchav

Member

to alchav
said by alchav:

I told you guys this when Verizon first came out with FiOS, that Fiber was the way of the Future. AT&T made the wrong decision, but that's what happens when you have Bean Counter BellHeads. Verizon is all set up to leave everyone else in the Dust!
I think AT&T knows very well that fiber trumps copper but they made a business decision to milk copper as long as they can. I repeat its a business decision not a technical one. AT&T just did not want to foot the multi-billion bill to wire everyone with fiber.

In AT&T areas the incumbent cable companies don't run FTTH so why should they? Its expensive and I guess AT&T was not "sold" on idea of FTTH. AT&T nailed down a very simple concept which is that people hate their cable companies so much they'd jump ship to anything else given half a chance, regardless whether its a twisted pair or the fiber. And technically speaking U-Verse provides decent enough service and offerings inside the house and if the price is right people will switch. And people apparently are switching. Few years down the road when the same people will realize that DSL cannot get a fat enough pipe they'll start jumping back to their local cable company that will deploy DOCSIS 3.0 by that time. And that's when AT&T will start stringing fiber to everybody's doorstep.

ztmike
Mark for moderation
Premium Member
join:2001-08-02
La Porte, IN

ztmike

Premium Member

Rural Areas Verizon!

That's all nice and dandy..but the next town over (10 miles or less) which just happens to be served by Verizon is still running on DSL, and NO WORD on FiOS in that area..which happens to be "LaPorte, IN."

Its to bad for my city though..which is served by AT&T and no U-Verse is in sight here either.
Bob61571
join:2008-08-08
Washington, IL

Bob61571

Member

Re: Rural Areas Verizon!

said by ztmike:

...but the next town over (10 miles or less) which just happens to be served by Verizon is still running on DSL, and NO WORD on FiOS in that area..which happens to be "LaPorte, IN."
ztmike....
The only Verizon FiOS available in the entire Midwest(Ohio, Michigan, Indiana, Illinois, Iowa, Wisconsin, Minnesota) that I am aware of, is in Fort Wayne, Indiana(and 2 suburbs). Verizon has ignored their old GTE North/GTE Midwest area, when it comes to FiOS. There have been concerns that Verizon has tried to sell off this territory.
(see »oneohio.blogspot.com/200 ··· ree.html ) This may explain the lack of FiOS in the Midwest.

The old GTE North/Midwest service are tends to be located in the smaller metro areas/suburban/rural areas in each state. AT&T tends to be in the bigger Midwestern cities(like Chicago, St. Louis).

Metatron2008
You're it
Premium Member
join:2008-09-02
united state

Metatron2008

Premium Member

NSAT&T run by complete idiots.

People give them credit for only doing what they wanted to do.

I suppose it hsn't occured to these people that when at&t needs to plant fiber to people's homes, THEY WILL NEED TO HIRE ALL THE CONSTRUCTORS AGAIN, AND THIS WILL COST THEM ALOT MORE MONEY THEN VERIZON AFTER ALL IS DONE.
cornelius785
join:2006-10-26
Worcester, MA

cornelius785

Member

Re: NSAT&T run by complete idiots.

DO YOU HAVE PROOF OR ARE YOU JUST SPREADING FUD AND HATE FOR ATT?

Super Dave
@rr.com

Super Dave

Anon

I agree

I am a AT&T employee and I agree with you that Verizon did it right from the start. AT&T has this idea that they are right and everyone else is wrong when it comes to the TV market. IPTV maybe the right way to go but FTTH is the best way to deliver that technology to the home. Its easier for Verizon to change to IPTV over full 100% fiber. They don't have the bandwidth issues that has uverse customers leaving in numbers that AT&T would rather not admit. The problem for the customer is that most will not get a side by side comparison to look for themselves hot Fios is a better product. It really doesn't take that much to see the better service. Use there words against them. They use the words "robust fiber network" to sell the service. I guess its easy to see 100% is better than 70%, 80% even 90%. Its even more evident when you see in electronics you are only as good as the least in the circuit. Its like using all .5% components in the circuit and then placing a number of 5% components in the output stage. Uverse is to ford like FIOS is to Benz. (No comparison). I would like to get 20 up and 20 down. You will never, EVER GET THESE NUMBERS FROM UVERSE (until they go 100% fiber). I did say only four streams and don't ask for more than two HI def TV's. You may have a problem-Houston.

ddg4005
Premium Member
join:2001-08-22
Bronx, NY

ddg4005

Premium Member

Fios gamble paying off

OK fine, Fios is paying off for Verizon. Now when the hell will the deploy the TV and Internet services in the Tremont section of the Bronx? Enough with the talking already .

•••

IM1811
join:2001-08-20
Haverstraw, NY

1 edit

IM1811

Member

The first real service upgrade in 88 YEARS.

I live in a small town in suburban NYC. The house I live in was my great-grandfathers house, and it was built in 1880. Around 1920, my grandfather splurged and bought his parents telephone service. The phone they installed was a WE model 50AL, a candlestick phone. The wiring they ran from the pole and thru the house was never upgraded to the best of my knowledge. The phone number never changed either. In the 80's, as deregulation took hold, the phone company was called and asked to upgrade jacks, add extensions, and whatever else they needed, but still the same old copper.
The simple fact is that after 88 years, the phone company has finally spent a couple of bucks upgrading my service. I don't think is was a big gamble, I think it was high time Verizon updated their infrastructure. Every other Telco will have to do the same, eventually.
See Old Phones:
»www.arctos.com/dial/

payingoff
@comcast.net

payingoff

Anon

'Gamble' maybe.... 'Paying off' = not yet

In the spirit of sub-prime stupidity and poor financial decisions on wall street, I wonder if someone can explain the economics that merit the title of So Far, Verizon's $23 Billion FiOS 'Gamble' Paying Off

If I were to borrow/spend 23 Billion dollars and had a return on investment (ROI) strategy that did not pay for the investment for about a decade (no real profits), would that be considered a "paying off" off description at this point?

The reality is, this is a 23 billion dollar investment to avoid going over a very visible copper cliff.

dvd536
as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ

dvd536

Premium Member

A shame

Verizon doesn't gamble in arizona.
VZ buy qworst already.

•••••

True_Coverage
@sprintlink.net

True_Coverage

Anon

TRUE Broadband

Verizon to rule wireline broadband and Sprint to rule wireless broadband or can Verizon invest another $23B to compete with Sprint over wireless broadband.

rural
@metrocast.net

rural

Anon

waiting and waiting...can I get excited now?

Wait a minnow!
Verizon is moving FIOS into high DSL subscription areas?
Every household down our road is on cable or satellite. Why? The old copper wire is only buried about 2" below the surface, so when the weather is not clear, neither is the service.
After waiting many years for DSL, Verizon said it was finally available to us. I was ready to sign up until I learned that it would be provided over the same old infamous copper wire that chased us all off the landline to begin with. I declined and tried to explain that I had no interest in an undependable service no matter how fast it might be while it was working.
Duh!
Now, the electric company is burying their lines and have told us that Verizon has been advised of this. It's up to them whether they upgrade at the same time. Well, there's a crop of new and larger boxes being installed by Verizon up on the main road, the markings on the road cross it towards our road up at the corner. Could this mean FIOS is coming? There's a black tube being buried...looks to be about 1-1/2" in diameter...what might be in it?