dslreports logo
site
spacer

spacer
 
   
spc
story category
Verizon Might Someday Look At Expanding FiOS Further
by Karl Bode 09:40AM Wednesday Mar 12 2014
Outside of large city franchise obligations, Verizon's FiOS deployment has been frozen for several years as the company seeks to recoup its investment -- mostly through an endless slate of rate hikes on TV and broadband services. Speaking this week to investors, Verizon CFO Fran Shammo stated that the company might someday push FiOS further, but it's not happening anytime soon. "I am not going to build beyond the current LSAs that we have built out," Shammo said. "We have to generate more cash within the wireline business and once we do that and I feel that FiOS has returned its cost of capital, then we can look at expansion, but at this point we're happy with what we have."

view:
topics flat nest 
BosstonesOwn

join:2002-12-15
Wakefield, MA
Reviews:
·Verizon FiOS

1 recommendation

In short..

"Expansion will happen only if everyone buys our product and we can continually rate jack like our wireless side. I am short sighted and fail to realize, wireline is not really dieing just in a lull due to expanding wireless where most of our money goes. After all who will buy my 2nd and 3rd lovers new cars and expensive dinners if I can't due to the lower profits we would see for the first 6 years ?"

Why can't they ever just be open and honest with everyone, not just their trusted yesmen ? Just say it, until the profit % is met we have no plans on expanding fios, and will expand once we hit the % and our cash cow wireless stops needing injections of cash every day.
--
"It's always funny until someone gets hurt......and then it's absolutely friggin' hysterical!"

cableties
Premium
join:2005-01-27

Re: In short..

said by BosstonesOwn:

...

Why can't they ever just be open and honest with everyone, not just their trusted yesmen ? Just say it, until the profit % is met we have no plans on expanding fios, and will expand once we hit the % and our cash cow wireless stops needing injections of cash every day.

Really. They think we are the bottomless cash cow, along with the fed-subsidies. No one ever thinks of long-term gains. (everyone I know that is on Fios, was a switcher from cable. But the price point for triple-play needs to stay at/under $80/month, not $120, not $200... )

What was it... oh yeah, cherry picking....
--
Splat

aaronwt
Premium
join:2004-11-07
Woodbridge, VA

Re: In short..

said by cableties:

said by BosstonesOwn:

...

Why can't they ever just be open and honest with everyone, not just their trusted yesmen ? Just say it, until the profit % is met we have no plans on expanding fios, and will expand once we hit the % and our cash cow wireless stops needing injections of cash every day.

Really. They think we are the bottomless cash cow, along with the fed-subsidies. No one ever thinks of long-term gains. (everyone I know that is on Fios, was a switcher from cable. But the price point for triple-play needs to stay at/under $80/month, not $120, not $200... )

What was it... oh yeah, cherry picking....

$80 a month? Even when I had direcTV in the early 2000's it was over $100 just for TV. Right now Comcast can't even offer me anything comparable to FiOS without it costing at least $20 or $30 more. I'm only paying under $250 a month right now for the quadruple play with cellular which costs the most out of the four services.

Verizonguy

@192.76.82.x

Re: In short..

Check out the new double up promo- It will help you save money if you have Fios and Verizon Wireless. $20 a month.
openbox9
Premium
join:2004-01-26
Germany
kudos:2
said by cableties:

But the price point for triple-play needs to stay at/under $80/month, not $120, not $200... )

Where can you get a triple play for anywhere close to $80/mth? Even the 'almighty Google' isn't meeting that price point.

Cherry picking? Please. That's been demonstrated false enough times.
ptbarnett

join:2002-09-30
Lewisville, TX

Re: In short..

said by openbox9:

Where can you get a triple play for anywhere close to $80/mth? Even the 'almighty Google' isn't meeting that price point.

Verizon offers a triple play package for $69.99/month in the first 12 months, and $89.99 for the subsequent 12 months. The average cost is $79.99/month over the 2 year period.

Of course, that's only 15/5. For another $10/month, you can boost it to 50/25.

But, you still have to pay all the taxes and fees, and rent a STB/DVR. There's also the $5 router rental.

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1

Re: In short..

They can sell the service for $10, but they will just make it all back in fees with equipment rentals or by adding some ridiculous scheme in the billing like a broadcast channel recovery cost.

You can never strictly refer to the advertised rates anymore. You have to look at the overall bill to get a real sense of how much the service costs. As an example, Comcast went several years without raising the cost of their HSI service. This was only possible as most people also subscribed to TV/Phone service, and these rates did go up bi-annually in some way or another. And if a customer only subscribed to HSI service, they were already paying a $20 premium for the same service as a subscriber with bundled services.
openbox9
Premium
join:2004-01-26
Germany
kudos:2
said by ptbarnett:

But, you still have to pay all the taxes and fees, and rent a STB/DVR. There's also the $5 router rental.

I used to have the FiOS 15/5 service for like $60/mth. Looks like much better deals available these days.
ptbarnett

join:2002-09-30
Lewisville, TX

Re: In short..

When I logged in and looked at the actual offers for my area, it was as I described. It must be different for different areas.
jjeffeory

join:2002-12-04
USA

Re: In short..

Yes it's different for different areas.
jjeffeory

join:2002-12-04
USA
So then it's not really $79.99 if you have to pay more than that. My FiOS is around $166 a month. Was $180 for a couple months of their mistakes, which is took them a while to correct.
Crookshanks

join:2008-02-04
Binghamton, NY

1 recommendation

said by cableties:

No one ever thinks of long-term gains. (everyone I know that is on Fios, was a switcher from cable. But the price point for triple-play needs to stay at/under $80/month, not $120, not $200... )

I love the armchair quarterbacking from people who have never run any sort of business, never mind a Fortune 100 DJIA component. Verizon needs money for the LTE buildout. Wireless is still a growth market, wireline is not. They are thinking of the long-term, it's just not the long-term that people around here think they should be focusing on.

Wireless market: Still not fully mature, tens of millions of people don't have smartphones. Verizon is the industry leader, with only one serious competitor (AT&T), and so stands the best shot at winning over these customers when they go to smartphones. Additionally, they need to expand the existing network to retain the customers they already have, while filling in the remaining gaps so they're ready for the VoLTE transition.

Wireline market: Fully mature, most everyone who wants a Triple Play has one. Verizon is forced to compete against entrenched incumbents whose infrastructure is mostly paid for, so they can always beat Verizon if it should come down to a pricing war. The market is more heavily regulated, in some cases to the point that Verizon has to negotiate with dozens of individual municipalities before they can bring in service. They can only expand by sniping customers from the MSO, which is more expensive than selling to new customers in a growth market.

They're making the right decision, from a business standpoint.
jjeffeory

join:2002-12-04
USA

Re: In short..

Who the hell wants a triple play? lol
elefante72

join:2010-12-03
East Amherst, NY
I have a hard time grasping where people are all up in arms paying $120 for triple play which in the case of FIOS (and some boxes) has unlimited internet, unlimited phone, and a decent TV package (you can go crazy). Less than 10 years ago you couldn't get any of that for that price, and internet wasn't anywhere near these speeds. A similar package on the local robber barons (TWC) would cost at least $160 for inferior internet and TV PQ and even worse 1999 STB.

I pay less than $100 for a 3-play (however I do VOIP myself), and I think that is a phenomenal value. I really could do without the TV and go for $70, but $30 (or a dollar a day) keeps the wife away and if you think about it, that is not a lot of scratch.

Just having a single wireless phone can cost you that much for say 2GB of data not to mention you are paying $650 (hidden fees or not) for something that should cost $200 at most.

The profits that microsoft and Apple have in their businesses make the meager profit margins in FiOS wireline look like a joke.

The real bad guys in this equation are the content creators, bar none. They are the ones jacking up prices, and the operators need to recoup that cost. You can say they can negotiate, but look at what happened to TWC when they flinched last summer.

So I say you whiners clam up, because everyone is an armchair QB until their knitting channel gets cut off due to a carriage dispute, and then they take out the streets in a mob calling for the guillotine for the operators, when in fact they should be camping out in midtown at name you content conglomerate HQ.

Most people have a hard time seeing whats in front of your face, do you think they understand the intricacies of delivering content to the end user. If people even tried to read a content contract (I have), they would be amazed how byzantine they are. For people in Unions, it's similar to a union contract, BUT WORSE.
ptbarnett

join:2002-09-30
Lewisville, TX

Re: In short..

said by elefante72:

The profits that microsoft and Apple have in their businesses make the meager profit margins in FiOS wireline look like a joke.

Yes, I don't think people realize this.

Microsoft's net profit margin is 26.75%. Apple's is 22.70%.

Verizon: 16.31%. That's not "meager", but only slightly above the industry average of 14.6% for domestic telecom providers.

To round it out: AT&T is 20.85% and TW Telecom is 3.85%.

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

Re: In short..

said by ptbarnett:

said by elefante72:

The profits that microsoft and Apple have in their businesses make the meager profit margins in FiOS wireline look like a joke.

Yes, I don't think people realize this.

Microsoft's net profit margin is 26.75%. Apple's is 22.70%.

Verizon: 16.31%. That's not "meager", but only slightly above the industry average of 14.6% for domestic telecom providers.

To round it out: AT&T is 20.85% and TW Telecom is 3.85%.

and youre including their wireless business in that?
ptbarnett

join:2002-09-30
Lewisville, TX

Re: In short..

said by ITALIAN926:

and youre including their wireless business in that?

I simply cited the net profit margin for AAPL, MSFT, VZ, T, and TWTC, per their respective annual reports. You can find the data quickly and easily with Yahoo Finance's Industry Browser, and compare it to their competitors:

»biz.yahoo.com/p/

If you think you can derive separate profit margins for the different businesses from their annual reports, knock yourself out.

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

Re: In short..

Well, the point is, youre making such citations involved in a FiOS expansion debate, but 98% of their profits come from Wireless. It sucks, I know, but reality cant be ignored. There is plenty of money to be made from FiOS in the future, but all they care about is wireless right now.

Considering they spent 120 billion on the Vodafone deal, another 30 something billion to complete the FTTP build shouldnt be portrayed as such a big deal.

Hell, if they announced they were committed to replace all their copper with Fiber, Id buy more Verizon stock. Thats a company that would be completely future-proofing themselves.

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1
The price per bandwidth has gone down for the providers more significantly than these saving have been passed along to the consumers. That $120 triple play package is over $200 unless you only have a single, standard definition TV and don't need a DVR.

I'd be interested to see how salaries and perks going toward a few top level executive and lobbying firms impact the overall profits of Verizon, AT&T, and Comcast. Bullying the market and schmoozing politicians can get expensive, and probably accounts for much of the difference between the ISP giants and Microsoft/Apple.
sonofsmog

join:2003-09-09
Ontario, CA
Reviews:
·Verizon FiOS

Re: In short..

No one is making you rent their set top box or DVR. Run Windows Media Center or buy a set top box. Then all you have is a $4.99 cable card rental. To say the that $120 Triple play is over $200 is a flat out lie. I have the 150/65 FIOS Ultimate double play and that doesn't even come out to $200. Geez.
jjeffeory

join:2002-12-04
USA

Re: In short..

It's close though...

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1
said by sonofsmog:

No one is making you rent their set top box or DVR. Run Windows Media Center or buy a set top box. Then all you have is a $4.99 cable card rental. To say the that $120 Triple play is over $200 is a flat out lie. I have the 150/65 FIOS Ultimate double play and that doesn't even come out to $200. Geez.

All of these options cost additional money. In some situations these costs could be significant, and there is no guarantee that the customer is going to realize any savings over time. I have a box full of routers/modems, and a Moxi HD DVR to attest to this.

Just because you might happen to be in a unique situation where you can save a lot of money, a typical customer with 3 or more TVs is probably not going to spend the money on Tivo's (and the pricey subscriptions) or setting up a media server. If the tide changes and enough people start this trend, you can be certain that Verizon and larger providers will have to either adjust their base prices to continue making profits, or most likely spend millions to try and make it illegal or extremely difficult to use their services with 3rd party equipment.

I'm not just talking about a few specific scenarios, I'm saying that generally the pricing you see advertised is far from the actual prices that people typically see when their bill arrives. If everyone was able to follow your advice, the price would be much higher. I only wish there were some strict regulations forcing these additional fees to be more transparent to the consumer.

It is not that much of a stretch for a family of 4 to see a $200 or higher bill on an advertised triple play package listed at $120. It may even be on the low side of average.

SeanFromChi

@verizon.net
WMC is a headache. If there was a real option to the fios Whole house DVR I would have it. There is not. To use an xbox360 just to watch what the WMC recorded is a pain in the rear and not as easy as the WHDVR.

Dexter
Premium
join:2003-08-07
Beverly, MA
kudos:1

Re: In short..

said by SeanFromChi :

WMC is a headache. If there was a real option to the fios Whole house DVR I would have it. There is not. To use an xbox360 just to watch what the WMC recorded is a pain in the rear and not as easy as the WHDVR.

How so? I've been running WMC + XBOX extenders for 3 years now. My wife, who is the least technical person I know, has no problem with it.

I have a whole house 6 tuner DVR with a crazy mount of storage, all my (and my kid's) movies available on any TV without needing disks. The whole system has easily paid for itself by not paying any STB fees or DVR taxes.. Where is the headache?
--
My Flickr
Eek2121

join:2002-10-12
Newton, NJ
I remember paying comcast $99 for 3 meg cable internet in the early 2000s and thinking i was hot shit because everyone else was half the speed.
--
My beta Ruby on Rails tutorial site!

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1

Re: In short..

I was really popular on Napster with my T3 at the turn of the millennium.

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1
said by Eek2121:

I remember paying comcast $99 for 3 meg cable internet in the early 2000s and thinking i was hot shit because everyone else was half the speed.

Comcast remembers when they paid 85% of your payment to support your services. Now they only have to use 65% of your payment to support your services.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

1 recommendation

said by BosstonesOwn:

Why can't they ever just be open and honest with everyone

I'd say this was fairly open and honest.

Shammo said. "We have to generate more cash within the wireline business and once we do that and I feel that FiOS has returned its cost of capital, then we can look at expansion, but at this point we're happy with what we have."

I've been suggesting for quite a while that VZ will get back into fiber once CAPEX can slow for wireless. Until then, full steam ahead.

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS
People in the next town over have been waiting for FiOS for 5 years to become available (they only have FiOS internet and phone) Nobody signs up without the TV, thats simply lost revenue youll never get back Mr Shammo !!! Whats wrong with you ! lol This entire time, and in the future, this town could be turning a profit ! For all their business degrees, these people have ZERO COMMON SENSE.
They must own Time Warner stock.

candycane

@verizon.net

Re: In short..

Well the next town over is playing hardball for no good reason. If what your saying is true then how do u explain the fact that FiOS has more internet customers than TV customers. Triple play has a broader appeal yes but most can live with just internet.

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

Re: In short..

What I just said EXPLAINS why there are more internet customers than TV. There are towns without TV service due to lack of TV franchise agreements. Therefore, Verizon has more internet customers.
The adoption rate for FiOS is VERY LOW in towns without TV service, and those people usually have DirecTV or Dish Network, regardless as to what anyone on "broadbandreports" thinks.
silbaco
Premium
join:2009-08-03
USA

Re: In short..

Very true.

My ISP (not Verizon) is actively deploying fiber and it isn't the speed that is driving that subscriber growth. In fact the majority of people are simply subscribing to the same speed tier they could get on DSL which is 10 Mbps. It is the TV service that is getting new customers interested and driving the subscriber growth. Previously their TV options were limited to certain areas and now everyone can get it.

Not offering a TV service when you pay for the expense to deploy FTTH is just plain stupid.

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

1 edit

Re: In short..

Shhhhhhh saying such things on this website is !! blasphemy !! Everyone is "cutting the cord" !
Thinking about it though, they really need a new slogan. Someone switches to DirecTV, they dont consider that cutting the cord, when technically it IS the closest thing to cutting the cord. When someone cuts cable in flavor of Netflix, the same cords coming into the home, and within the home to the modem are still in-tact.

I always enjoy the headlines that read 200,000 people cut the cord ! Oh WOW, Im so impressed. So there are still 90 million households subscribing to pay TV? Whenever they post these seemingly alarming statistics, they should include PERCENTAGES to truly show the magnitude.

The conversion to streaming TV will be adopted much MUCH slower than POTS to VoIP. I mean Vonage basically introduced it like 10 years ago now, and there are still tens of millions of POTS landlines out there?

We'll still be talking about cutting the cord when Im old and gray.

Now here comes the rodeo of cowboys telling their tales of cord-cutting, how because they did it, everyone else must be. An internet site dedicated to broadband, not sure what else id expect though.

buzz_4_20

join:2003-09-20
Limestone, ME

Might Someday Look

That's some promising language.

connections

@pppoe.ca

Re: Might Someday Look

This was sarcasm, right?
moulder3

join:2007-05-21
Boston, MA

Hmmm

Sounds like 'not happening anytime soon' (aka non-story). Then again, I hope their inaction means community fiber can spring up instead of Verizon & Comcast controlling so much of the residential broadband market.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:4

Someday, Verizon-Might-Look-At-Expanding-FiOS

Sounds like a song from the wizard of Oz.
Except rainbows have a scientific basis, and this is a fantasy.

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
kudos:1
Reviews:
·Verizon Broadban..
·Comcast

This means rural areas are screwed

The keyword: In the unlikely event they expand FiOS.
At least this means hope for dense urban areas like Springfield, MA. Once you get out of the Pioneer Valley and into Palmer, Monson, and Blandford; forget it. They want 8 customers on one pole, not one customer ever two to three blocks (or miles).

Boston and Baltimore might get their FiOS fix as well.
silbaco
Premium
join:2009-08-03
USA

Re: This means rural areas are screwed

They almost certainly will. Servicing Boston and Baltimore with LTE makes zero sense and Verizon knows this. They are most likely just waiting until current commitments are done and reinvestigate deploying FiOS. If I recall they were not offered the most favorable terms the last time they tried. Perhaps things will have changed.

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
kudos:1
Reviews:
·Verizon Broadban..
·Comcast

Re: This means rural areas are screwed

Favorable terms here in Springfield would be the ability to pick and choose which parts of town to serve such as leaving out the northwest part of the city and the neighborhoods that would be left out would be mostly the Brightwood, North End, and South End areas (which are mostly poorer neighborhoods or mostly dense tenement buildings that are difficult to wire).

The thing about FiOS is Verizon has no problem charging the FiOS rates in non FiOS areas for telephone and DSL.

They'd get a much higher yield if they could shut down the pots network but only on the condition from regulators that it be replaced with FiOS.

It's just that the DSL makes the books look bad. I do have a Home Phone/DirecTV bundle from Verizon but I would take FiOS TV and Internet any day. Unfortunately I'm stuck with Comcast for internet.
--
I've experienced ImOn (when they were McLeod USA), Mediacom, Comcast, and Time Warner and I currently have DirecTV. They are much better than broadcast TV.

I have not and will not cut the cord.

Camaro
Question everything
Premium
join:2008-04-05
Westfield, MA
kudos:1

I think they might.

If by some freak chance Google fiber starts to come to city's that Verizon has a monopo.... I mean services.

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

2 edits

Re: I think they might.

what was that M word? because in virtually every town that FiOS has been deployed is a major cable company. In every town they cover without FIOS, theyve already been destroyed by the cable companies. In those towns where they have been "destroyed" by cable, they are still mandated to share their networks with clecs/wholesalers.
You might want to look up that M word in the dictionary.

Camaro
Question everything
Premium
join:2008-04-05
Westfield, MA
kudos:1

Re: I think they might.

Hey I was having a good day yesterday, haven't had one in a while. I know it's wishful thinking.
Planoboy

join:2013-07-14

Fios pricing

My parents pay $84 after all taxes and fees for Select TV, 50/25 internet, and home phone. They dont have HD boxes though.

NOCMan
MacChatter
Premium
join:2004-09-30
Colorado Springs, CO

FIOS Is not the Problem it's the former MCI Business

FIOS is profitable, but before FIOS VZB has consistently never turned a profit. Get rid of it. What was the ROI timeframe when VZB was formed from the remains of MCI? Surely it was not a decade and a half.

Just like if Verizon Wireless was spun off as it's own company and not used to protect VZ's failing business sections it would be making tons of money instead of subsidizing VZ's declining businesses.
pittpete1

join:2009-06-12
Reviews:
·Frontier Communi..

Look at all those headlines

___________ is looking to deploy 1gb fiber networks in ____________ town.
Same thing back in the day when Bell Atlantic sat there while cable ran brand new infrastructure. Lets just collect our profits and not think about the future. Cable killed them and they tried to compete with DSL. Now they install FIOS and Mr McWireless sits there while cable and other companies pass Verizon. Instead of competing with just cable, wireless on the other hand has to compete with many cell companies.