Verizon turns heads

Verizon Technology Organization (VTO) allowed analysts into its Waltham, MA labs recently to tour its FiOS test integration and digital home labs. Ovum-RHK, for one, left with an extremely favourable impression of Verizon’s FiOS fibre-to-the-premise (FTTP) -based triple-play programme.

Verizon now has close to 500,000 FiOS subscribers of which 100,000 are FiOS TV subscribers. The service provider also expects its investment in FiOS to earn positive operating income by 2009, with a positive impact on earnings in 2008. From 2004 through 2010, Verizon believes that it will have spent $18 billion passing 18 million households, says Ovum-RHK.

“Basically, they were there to tell the analyst community “look at us, we are doing the right thing, it’s economically viable, and it will pay off.” They are off to a good start,” says Ken Twist, vice president, technology consulting and broadband networks practices at Ovum-RHK.

Will the increasingly favourable reports on Verizon's progress change the plans of other carriers? A recent report by U.S. investment banker, Cowens & Co., says that AT&T remains committed to its Project Lightspeed fibre-to-the-node (FTTN) deployment through 2009. But with cable operators looking to upgrade their networks with FTTH beyond 2010, the competitive landscape is shifting rapidly. “AT&T may feel compelled to transition from FTTN to FTTH more rapidly,” the report says.

Cowens & Co. makes a further observation that while the financial community concentrates on AT&T’s Lightspeed project, it expects the service provider to “focus on its largest and highest growth potential businesses – wireless and Enterprise”.

These represent 60% of its expected revenues in 2007. Residential, in contrast, accounts for 23% of revenues only, and Cowens & Co. expects it will generate modest growth only.

Fibre is not the sole way for a carrier to bolster its financial performance.