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story category Critic: Fios Risk May 'Kill' Verizon
'Can't compete with companies deploying [cheaper] networks'
(old news - 06:48PM Tuesday Nov 21 2006)
tags: Fiber · competition
Preston Galla over at Computer World isn't particularly impressed with the Verizon Fios business plan, and suggests that the ambitious fiber to the home (FTTH) deployment may "kill the company." "There's simply no way Verizon can compete with companies deploying a far-less costly network," Galla insists.

Galla instead likes AT&T's plan to run fiber to the curb and use VDSL for the last mile, the company going back later if demand is there. While that may be more easily digestible for investors, that decision isn't without its own capacity questions we've mentioned, and you've discussed, a thousand times.

Is Verizon's move to future-proof their network (with technology that's a handful for cable competitors) really that big of a risk?

Related:
  1. Powell Completes FTTH Build
  2. What Network Neutrality Is REALLY About
  3. Who Knew? Home-Rolled Fiber Lowers Cable Rates
  4. TDS Telecom Launches 50 Mbps Fiber
  5. Verizon FiOS Growth Slowing Down
  6. Verizon Job Cuts Just Keep Coming
  7. Bell Canada Introduces 'Fibe'
  8. ISP Offers 200 Mbps Residential Service In Vancouver
Forums » Critic: Fios Risk May 'Kill' Verizon
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MadMANN
Premium
join:2005-08-19
·Comcast

Only time will tell

They (Verizon) have already raised rates and they've been in the game for about 10 minutes. I know I would NOT want to be an investor with them right now.

Everyone keeps saying that "in the long run" it will be a far less costly network to maintain, (which is a load of crap if you ask me) but the problem is actually building it and staying afloat long enough for all of that to pay off.

Only time will tell. And lots of time is going to go by before you see any black ink on this project.

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

Re: Only time will tell

Can't compete? Pullllllease!
if fios were avail nationwide the cable companies would have hardly any hsi business.
--
You can never be too rich, too thin or have too much Bandwidth

halfband
Premium
join:2002-06-01
Huntsville, AL

Re: Only time will tell

That's the point, it's not available and is costing Verizon a lot to roll it out. It will cost billions to reach the same customer footprint as cable. If it is really cheap to maintain they may be able to roll it out slowly, but the debt from a fast rollout will kill them.
--
Registered Bandwidth Offender #40812
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
·Time Warner Cable
·buckeye cable

Re: Only time will tell

Also not everyone is going to shop for HSI by speed. Many people shop my price. Look at the thousands of people that are still on dial-up that can receive HSI. It's either not needed or too much for their budget. Instead of rolling out faster speeds maybe they should make slower tiers and roll out services to target the end-user on dial-up and then convert them over. Maybe on Cable give them bursts of speed like as a "trial" service to see if they'd want a faster tier.

But FoIS may kill the company if they roll it out to areas that do not want the speed.
PDXPLT

join:2003-12-04
Banks, OR

It's not about HSI....

Verizon's reasons for deployinh FIOS has little (not zero, but a little) to do with selling HSI. They use only a small portion of the available bandwidth for HSI.

High-Speed Internet is actually a pretty crappy product to sell. Customers in the U.S. will only accept paying a flat monthly rate for unlimited access. It's not a great use of network resources to sell it as this type of service, and Verizon only does it for competitive reasons.

The main reason today to deploy FIOS is to sell TV. It's been proven that U.S. consumers will spend big bucks for this. And forget about the lousy flat-rate business model of HIS: they'll pay extra for "enhanced level" channels, and pay again for "premium movie" channels, and yet again for pay-per-view, not to mention the BIG CASH COW of specialty sports subscriptions.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
·Time Warner Cable
·buckeye cable

Re: It's not about HSI....

How is HSI a crappy product to sell? Most if not all HSI connections in the US are unlimited and I'm including Comcast as well. Due to a company has the right to limit how much a customer uses to a certain point--especially if it starts to bring down their network.

And if VZ & ATT are having such a hard time or using too many company resources to sell HSI how come they're deploying these services? Don't you think if it was a waist to sell HSI nobody would offer it? And with VZ if they're plans are to offer HSI over Fiber then why are they doing it? They could have just left up the copper for that. But they have people to stand up against such as CableVision. If VZ doesn't offer it someone else will if there is a demand for it and VZ sees the demand with HSI.

Well wake up- most people in this country don't care to wait on anything. Especially in the terms of banking online, paying bills, or anything, even families that have kids; get them online get their home work done and get it over with. Nobody wants to wait to do anything.

Midak
Doctors suck
Premium
join:2002-02-26
Yonkers, NY

Re: It's not about HSI....

hottboiinnc, you missed his point. Most people who have HSI are satisfied with speeds that they get. I went from OOL with a 10/1 connection (when not being capped to a 3/768k DSL and I can still game and do most everything I did as well as I did on OOL. Tiered services sell, sure but not because of speed but because of the price. VZ needs FiOS to step on the cable companies TV biz, not the HSI biz. People will spend more on TV, order PPV, more premiums etc. and therefore spend more money. Cable companies often offer a free trial of some premium content to get the users hooked. Sure, you could increase BW for a month to see if the customer wanted to spend the extra $10 or so but chances are, they won't. Keep in mind that the above statements may contradict the feelings of some here but the BBR community is the single percentile of the HSI customers.

marigolds
Gainfully employed, finally
Premium,MVM
join:2002-05-13
Saint Louis, MO

said by dvd536 See Profile :

Can't compete? Pullllllease!
if fios were avail nationwide the cable companies would have hardly any hsi business.
Cabel HSI is nothing but a marketing scheme to sell video.

Residential broadband will never be a profit maker because there are too many cheap broadband options and the many different options are too easily substitutable for each other.

FiOS TV is the important product here, not FiOS broadband. And the buildout costs of FiOS TV combined with Verizon's mismanagement of franchise negotiation are the big threats to investors.
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r8drfan4ever

join:2003-01-13
York, PA

Re: Only time will tell

I can tell you, from my own experience, that this statement is false. The margins on HSI are significantly higher than on video. There are barely any margins on video while on the HSI side, margins are very good.

jwersan
R.I.P. Mom, Brian, Ziggy, and Max.
Premium
join:2004-12-20
Port Jefferson Station, NY
clubs:
·Optimum Online

Re: Only time will tell

said by r8drfan4ever See Profile :

I can tell you, from my own experience, that this statement is false. The margins on HSI are significantly higher than on video. There are barely any margins on video while on the HSI side, margins are very good.
Correct, and since Verizon OWNS a good chunk of the "backbone" that makes up the "internet" their costs are VERY low to give you speed...

Hence even HIGHER profits from selling broadband...
--
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marigolds
Gainfully employed, finally
Premium,MVM
join:2002-05-13
Saint Louis, MO

said by r8drfan4ever See Profile :

I can tell you, from my own experience, that this statement is false. The margins on HSI are significantly higher than on video. There are barely any margins on video while on the HSI side, margins are very good.
Yes, the margins are nice, but the fixed capital costs will take 30+ years to recover even with high margins.
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guppy_fish
Premium
join:2003-12-09
Lakeland, FL
·Verizon FIOS

Verizon has no cash flow issues, they make enough money to pay a 4.6% dividend and they have they have more than one income stream.

Its all useless talking heads filling up space .. VZ is MUCH stronger than any telco in any possible way you can measure. They are much less leveraged than the cable co's who themselves have to constantly upgrade as well

The stock price doesn't mean much, I mean is google worth 500.00 on all the ways one measures a company's value?

For IRA or 401K, verizon is up 20% this year AND pays 4.6% dividend ... Not to many company's with such strong finances to pick from!

Topmounter
Sent By Grocery Clerks

join:2001-02-20
Evergreen, CO
·Cox HSI

Re: Only time will tell

said by guppy_fish See Profile :

The stock price doesn't mean much...
Tell that to the investment community bud.

If Verizon is spending money hand over fist and can't show a suitable return on investment in a reasonable amount of time, then investors are going to take their money elsewhere and Verizon's stock price is going to flounder.

I know you "think" that offering multi-Tbps fiber connections to residential homes for the same price as a cable modem is going to make Verizon an instant success and cause all competitors to vanish, but the fact is most consumers don't give a hoot what kind of wire is connected to their house.

When it comes down to it, there are only so many homes available to pass and Cable and Satellite are already the well entrenched incumbents in every single market where the Telcos are or will deploy. The Telcos will be lucky to get 20-30% penetration for the foreseeable future.

I certainly hope that the Telcos can get their networks upgraded and figure out how to play in a competitive market before giving up (again). The best thing for all of us is making sure Cable, Wireless and Satellite have some healthy competition.
daslog

join:2002-04-10
Milford, NH


1 edit

Re: Only time will tell

Most people in this forum are not interested in Financial analysis. They are much more concerned about more high speed internet connections. Return on investments and stock price flucuations are not even worth discussing, regardless of how important they are.

At any rate, If you speak to anyone who actually works at Verizon on FIIOS (like my father) they will tell you they don't think Verizon will ever make money on this.

Personally, I'd like them to suceeds, and my DSL connection is too slow.
itguy05

join:2005-06-17
Camp Hill, PA

quote:
If Verizon is spending money hand over fist and can't show a suitable return on investment in a reasonable amount of time, then investors are going to take their money elsewhere and Verizon's stock price is going to flounder.
So? The stock price of Verizon could be $0.01 and phone calls would still be made, internet traffic would still make it across Verizon's network, employees would get paid, etc.

The stock price for most well established companies have 0 effect on the day to day operations. In fact, stock only (very limitedly) comes in fact for expansion and capital raising functions.
datwell1

join:2002-01-08
Falls Church, VA

said by guppy_fish See Profile :

Verizon has no cash flow issues, they make enough money to pay a 4.6% dividend and they have they have more than one income stream.

Its all useless talking heads filling up space .. VZ is MUCH stronger than any telco in any possible way you can measure. They are much less leveraged than the cable co's who themselves have to constantly upgrade as well

The stock price doesn't mean much, I mean is google worth 500.00 on all the ways one measures a company's value?

For IRA or 401K, verizon is up 20% this year AND pays 4.6% dividend ... Not to many company's with such strong finances to pick from!
Yes. VZ is among the most "blue" of American blue chip companies. Remember that in earlier times, it took years to wire the nation for electricity and telephone (not to mention hot/cold running water and other indoor plumbing items). FiOS is a major paradigm shift (just ask anyone who has it) and this sort of thing often does not come quick, cheap and easy. VZ does have some issues (they are major "control freaks" regarding their products and services, for example); however, I suspect the only real issue for them is how long it will take for them to finally take over the entire USA.

jwersan
R.I.P. Mom, Brian, Ziggy, and Max.
Premium
join:2004-12-20
Port Jefferson Station, NY
clubs:
·Optimum Online

said by MadMANN See Profile :

Everyone keeps saying that "in the long run" it will be a far less costly network to maintain, (which is a load of crap if you ask me) but the problem is actually building it and staying afloat long enough for all of that to pay off.
Have you worked in the Telecom business??
I have and if you knew anything about how Verizon is PRESENTLY setup, you would understand that 90%+ of their entire network is ALREADY fiber, with the exception of some copper in the CO's, the only copper that still exists is from the CO to peoples houses. When they eliminate that, maintenance costs go through the floor, and reliability goes up. Translation, at the end of the day, profits also go up. This is win/win and should have been done years ago...
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en102
Canadian, eh?

join:2001-01-26
Valencia, CA
·RoadRunner Cable
·DSL EXTREME

Re: Only time will tell

Don't forget that the amount of copper from the CO to your home(s) is much higher than that the fiber backbones. Not only that... the highest cost to replace is 'the last' mile (aka node/curb to your house). Shooting a few pairs of fiber to a node isn't all that difficult... deploying fiber to each house from a node is a costly venture, especially it if is underground, and does not have PVC. AT&T recently rewired my neighborhood, as SCE melted up a few blocks of 24AWG between the home and node, and didn't have PVC installed . Replacing it would have been quick if they did. Now I have 6 pair of 22AWG (+12k feet).
I use my DSL for work, so stability/cost is my main concern. I don't need 20Mbps, as the VPN concentrator kills the speed anyways.

gatorkram
Spelling and Grammer impared
Premium
join:2002-07-22
Winterville, NC
clubs:

Give it time

In 10 years from now, ask this question again.
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Slidetbone
Mazin Go
Premium
join:2002-11-10
Land O Lakes, FL

Re: Give it time

Heck! Ask any of the telcos and Cable providers if their broadband risks paid off? Investors said the same thing about broadband 10 years ago!

Any new technology is a risk. Fiber is as ambitious as was the CD in the 80's.

A transport is a transport. Verizon decided on fiber to be able to reach more customers with broadband since DSL has coper limitations. SO? They went for broke. Remember when the telcos wanted IDSL or ADSL 2 to go over that 3 mile limit? Too expensive per Kbps.

It is all relative. The consumer in the end decides...
04875776
Rollin' up my dog ends
Premium
join:2006-11-14
Chicago, IL

First off, Computerworld? Shakes head...

Anyway, citing shaky statistics from a BT crony is hardly authoritative. They've got a lot riding on FTTH failing to survive being all-copper and no fiber. And isn't VZ's per-sub cost closer to $1500 than the $6K cited?

One thing VZ's got is cash flow. That the first post under this item is a cable employee rushing to badmouth FTTH speaks volumes, and vindicates VZ's assault on the cable monopolist's video stranglehold.

I wish Verizon well. Hopefully the AT&Ts, Qwests and Embarqs of the world will learn and emulate their success.

MadMANN
Premium
join:2005-08-19
·Comcast

Re: Give it time

That the first post under this item is a cable employee rushing to badmouth FTTH speaks volumes, and vindicates VZ's assault on the cable monopolist's video stranglehold.
And just where did a cable employee badmouth FTTH? Do people READ posts, or just look and see WHO is posting them when they post this crap?

I simply said "Time will tell." This rollout's financial burden is unprecidented. That is fact. If you are so sure that these guys will turn a profit, show me the stock receipts for the thousands of shares you would be willing to buy. It's a sure money-maker, right? So why not? Put your money where your mouth is. Just make sure you READ anything you sign.
04875776
Rollin' up my dog ends
Premium
join:2006-11-14
Chicago, IL

Re: Give it time

I rest my case.

Vanguard likes VZ. In fact Verizon is #10 on the top 10 holdings list for Windsor II. That's good enough for me to keep my money in that fund.

»https://flagship.vanguard.com/VGApp/hnw/···tExt=INT

Holding	                     Shares	 Market Value
Verizon Communications Inc. 25,854,854 $959,990,729

Where is yours?
systems2000
What? You Say It's Fixed. Hah

join:2001-11-29
Cyberspace
At least Verizon didn't raise their rates and restructure their charges within a year of deployment and then continue to slowly increase rates on their "CATV Blackmail" every year there after.

MadMANN
Premium
join:2005-08-19
·Comcast

Re: Give it time

said by systems2000 See Profile :

At least Verizon didn't raise their rates and restructure their charges within a year of deployment and then continue to slowly increase rates on their "CATV Blackmail" every year there after.
There hasn't been a "every year after" yet. Most areas are in their first year now. As the topic reads, "Give it time." I know, my username is "cableguy" so I don't know what I am talking about.
systems2000
What? You Say It's Fixed. Hah

join:2001-11-29
Cyberspace

Re: Give it time

You want me to post a copy of my bills for the last five years?

MadMANN
Premium
join:2005-08-19
·Comcast

Re: Give it time

I am not disputing anything about rate changes from your cable company. I am saying that FIOS hasn't been around long enough for you to make that statement.

As I said, there hasn't been an "every year after" with Verizon in reference to TV or FIOS internet. It's too new. Yet, their first rate hike came (is coming) about a year after deployment. 7%, I might add.

With the money they are spending on this whole project, there is no way that they will avoid substantial rate hikes. Especially as they add more programming and penetrate different markets.

Wait and see. You'll start seeing the threads in the FIOS forum just as you do in any cable forum here. The bitching has already begun. And these guys are supposed to be the savior from the evil cable empire? Please.
systems2000
What? You Say It's Fixed. Hah

join:2001-11-29
Cyberspace

Re: Give it time

Didn't mean to jump too hard about the reply, it's just that I have only dial-up as a financial alternate and I can't even get Comcast to fix problems I've been dealing with for five years (30% packet reorder, 15% packet loss on Comcast router in path, less than 4MB throughput, etc.).

When I go to the VoIP test sites to see if my line is capable of supporting the technology, I get less than a "1" out of "5." Lately, Comcast has shutdown my UPN channel and their response is that I have to contact the FCC. No Desire! No Fashion House!
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MadMANN
Premium
join:2005-08-19
·Comcast

Re: Give it time

As a field tech, I can't say/do anything about network woes beyond the actual plant, especially in an area in which I am not working or involved. If you have problems that are not getting resolved, I would message the executive complaint center. Believe it or not, there ARE people who read every single complaint and respond in some way. Why? Because they care about their business and your service. They are in business to make money, and you can't make money in the longterm by upsetting people who pay for your services.

As far as your UPN channel, I was under the impression that UPN no longer exists. They have merged with the WB and became MY. Was I misinformed? And am I to understand that you don't have the new channel?
systems2000
What? You Say It's Fixed. Hah

join:2001-11-29
Cyberspace

Re: Give it time

I'm so use to knowing them as UPN and WB. Your right about the change. WB & UPN became CW. "mynetworktv" is seperate and that is the programing that's not available.

MadMANN
Premium
join:2005-08-19
·Comcast

Re: Give it time

said by systems2000 See Profile :

I'm so use to knowing them as UPN and WB. Your right about the change. WB & UPN became CW. "mynetworktv" is seperate and that is the programing that's not available.
Ok I see now.
Sammer

join:2005-12-22
Canonsburg, PA
In 5 years the cablecos will be beating the pants off the telcos that stick with copper.

karlmarx

join:2006-09-18
iraq
·Fairpoint Communic..

It's simple. Adapt or die

Verizon doesn't really have a CHOICE in the matter. If they want to compete with the cable companies (docsis 3.0, etc), they are forced to upgrade their networks. The future is video on demand over IP. The future is 40mbs streams of 1080p HDTV. The future demands that the household of tommorrow is provided all the bandwidth it demands. The investors are too short-sighted to see that. If Verizon does a half-assed job, like AT&T is doing, they will get kicked out of not only their bread and butter POTS technology (to VoIP), but they will lose any chance of competing with Video.

Much as I despise Verizon, I have to applaud what they are attempting to do. Granted, we the taxpayers are subsidizing Verizon, with the huge tax breaks, but it's something that's got to be done. And once Verizon finishes wiring every home in it's territory, we can nationalize their network, and provide the best network in the world.
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nozzer

join:2004-06-25
Waltham, MA

Re: It's simple. Adapt or die

Yeah - lets "amtrak" them once they go BK
Personally I'd like to see all that fiber go into the public domain, and allow private companies to compete to provide the bits from the central office.

guest77


from:
OverModded See Profile

- Verizon takes a financial risk to deploy FIOS
- you "applaud" this deployment and risk of FIOS
- lets punish them and stop anyone else from doing it by having the government "nationalize" it

wow you got to love socialist logic

Fatal Vector

join:2005-11-26

Re: It's simple. Adapt or die



Who said anything about "nationalizing" it? I agree. It would be much better if the fiber were not owned by Verizon since, in the end it will just serve to maintain their telecom monopoly stranglehold well into the future.

It will amount to the same old duopoly: Cable and the telco, because they are the only ones with the financial ability to roll out fiber. That means that any competitors will have to use their networks and, as we have seen since 1966, that isn't about to happen any time soon.

PolarBear
The bear formerly known as aaron8301
Premium
join:2005-01-03
·CableOne

FTTH vs. FTTC

I think Fiber to the Curb + *DSL is a much easier, cheaper, and just as effective way to go; the only problem is, only AT&T/SBC is doing it (remember, SBC bought AT&T a year ago, but decided to "keep" the AT&T name; gee, I wonder why).

Verizon could do the same things they are doing with FTTH with FTTC, with much cheaper and easier deployment.
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See 6 replies to this post

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·AT&T Yahoo
·AT&T DSL Service
·Cox HSI

If Verizon offered the exact same service ....

... then FIOS costs would seem to be excessive.... but I think Verizon is thinking further ahead then that. I think Verizon is thinking full interactive telecommunications. With FTTH Verizon can deploy not only super high speed internet and VOIP services, but can also offer HDTV video services including video-on-demand. AT&T's system simply can't do that, and at&t will end up having to come back in and continually upgrade (at greater expense). Verizon could also offer all kinds of interactive content or specialized services (such as security, alarm, gaming, Tele-commuting, etc.)

I see big time profit potential on the service side.
--
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Shrapnel64
Premium
join:2001-01-24
Hayes, VA
·Verizon Online DSL
·Cox HSI

Re: If Verizon offered the exact same service ....

Now I may be thinking ahead of myself here, which if I am dreaming, please wake me up...but, it would be pretty sweet to see Verizon deploy a 100mbps line (symmetrical) to each home sort of like they do for their TLS Service.

I know this will take a long time to do, but I can see that happening in the future with all of the VOD services.

Fatal Vector

join:2005-11-26

Re: If Verizon offered the exact same service ....



Actually, it would be refreshing to see a major corporation think further into the future than it's immediate quarter profit. Maybe it would start something good in business for once instead of the standard rape the customer attitude that will, ultimately, be many of their downfalls.
SeanFL

join:2006-01-25
Tarpon Springs, FL

Fiber to the home makes sen$e

Fiber to the curb is a band-aid and those that deploy only near a house are going to have to do another roll out in a few years. Verizon is smart to do what they're doing...I hope they hurry up and figure out how to speed up the process so their earnings will show the benefits. I know a number of people that can't wait to sign up for the triple play.

And I know a number of cable and other dsl providers that would like you to believe their FUD about FIOS.

Cjaiceman
Premium,MVM
join:2004-10-12
Parker, CO

Re: Fiber to the home makes sen$e

I would love to get FiOS, 50/5 internet, Telephone and HD in 1080p... If I lived in an area that could get it I would drop Comcast faster than a dress on prom night.

NOCMan
Verizon Fios User
Premium
join:2004-09-30
Flower Mound, TX

Long Term Investors Like Verizon

If it was such a bad decision then the long term investors would not be buying up VZ stock.
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OverModded
Premium
join:2002-03-03
·Sprint Mobile Broa..
·Comcast

Re: Long Term Investors Like Verizon

said by NOCMan See Profile :

If it was such a bad decision then the long term investors would not be buying up VZ stock.
I am not so sure long term investors are, as you say, buying up the stock. The stock is down from 2 yrs ago and it has been up this year but has been going down since the last qtrly results were announced.
»finance.yahoo.com/charts#chart1:···;source=

So, I would say that investor reaction has been mixed since Verizon started on its Fios adventure.
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axess_denied

join:2004-07-23
Long Beach, CA

Re: Long Term Investors Like Verizon

To a large extent, investors value a stock based on earnings, or perception of future earnings. Verizon has experienced a drop in earnings due, according to a ValueLine Investment Survey assessment, to their purchase (and integration) of MCI. This drop in earnings is the "technical" explanation for why the company's price has decreased.

That being said, if Wall Street sees an investment (FIOS for example) as having a low return on investment, the expected earnings for the company will be revised down (with a resulting decrease in the perceived value of the stock).

The same ValueLine analyst (from above) states that Verizon, as of 9/29/06 has hit 12% uptake on FIOS and is likely to hit 30% within 5 years. As I recall, the company (within the last month or two) showed a break even on the FIOS investment within that time frame. If so, and baring any material strategic changes, it would seem logical that Verizon should be well positioned to experience strong growth in earnings shortly thereafter - which one would expect to translate to a higher stock price.

As an aside, it is interesting to note that the compensation structure for VZ's CEO is based largely on the company achieving key strategic objectives (according the Wall Street Journal). In contrast, AT&T's CEO's compensation is tied more directly to the company's stock price. This would lead one to believe that VZ's board of directors (elected by stockholders) is taking a long term approach to managing the company. Personally, I see this as a positive sign that the company's leadership is committed to completing the FIOS investment, and - if their cost structure numbers are legitimate (if not conservative), I would anticipate that the company (and buy & hold investors) will be rewarded quite richly. However, those looking for quick buck are unlikely to see rapid, near term share appreciation.
ITALIAN926

join:2003-08-16
Stratford, CT


1 edit

..

"kill the company"

Anyone who thinks Verizon is going bankrupt needs to get some common sense. This is a company that generates like 80 billion dollars a year.
As deployment costs decrease, you will see faster deployment. They have made the right choice here and in the long run theyll be benefiting. The key to success are the local TV franchises.. it seems every day they are adding more.

halfband
Premium
join:2002-06-01
Huntsville, AL


3 edits

Re: ..

That 80+B is revenue. Now EBITDA earnings are still a huge 36B but after taxes and debt servicing that leaves 6B which is only a couple of dollars a share for the shareholders. Not a spectacular return. They are very limited in how much more debt they can take on to roll this out, it is going to have to start generating the revenue to fund more buildouts. The only problem with that is it stretches the buildout to well into the next decade. This is a huge gamble, it has to work quickly to generate the cash to keep it going.
--
Registered Bandwidth Offender #40812

Fatal Vector

join:2005-11-26

Re: ..



The thing to remember is that as more and more fiber is installed, more and more customers will sign up, just like a snowball rolling down a hill. And, as time goes by, it will cost less and less to install.

Werizon has made the right decision here and it will be shown in the coming few years.

n2jtx

join:2001-01-13
Glen Head, NY

The Interstate Model?

I don't think the government would ever let Verizon fail. I suppose in a financial pinch, an option would be for Verizon to turn over ownership and future deployment of FiOS to the government who could then treat it like a road. Any provider could then have access to it by paying the appropriate fees to access it. Customers would hook in to it and have their choice of service providers. There is certainly enough bandwidth to handle such a business model.
--
I support the right to keep and arm bears.

Need BB

join:2001-12-21
Rochester, NY

Re: The Interstate Model?

With current copper technologies, copper performance is maxed out. Verizon could sit back and sell inexpensive dsl, but they would end up like AOL. The current copper Verizon network has reached it's potential! The physical medium of coax has a much greater bandwidth capacity compared to 19-26 gauge copper. Telco's witch don't upgrade there network will be in a losing position in 10 years.
cwh

join:2006-05-14
San Antonio, TX

Re: The Interstate Model?

said by Need BB See Profile :

With current copper technologies, copper performance is maxed out. Verizon could sit back and sell inexpensive dsl, but they would end up like AOL. The current copper Verizon network has reached it's potential! The physical medium of coax has a much greater bandwidth capacity compared to 19-26 gauge copper. Telco's witch don't upgrade there network will be in a losing position in 10 years.
While copper will never be able to beat fiber in a bandwidth contest, it is not maxed out either. Both copper and fiber technologies continue to improve.

jgkolt
Premium
join:2004-02-21
Lakewood, OH
clubs:

wish fios was here

go fios
guppy_fish
Premium
join:2003-12-09
Lakeland, FL

1 edit

Mods please delete

Never mind was suppose to be a reply to topic?
floydb_1982

join:2004-08-25
Kent, WA

Bye Bye Verizon

Bummer for Verizon. I mean there spending billion up on billions of dollars to get fios directly to your homes. Its a wonder Verizon has not gone backrupt yet.
tmc8080

join:2004-04-24
Floral Park, NY

Copper proven wrong, time and again

What was FINALLY made abundantly clear to Verizon was that copper pair networks were unable to compete with docsis 1.0, 1.1
Alot of people forget the secondary reason why Verizon made the leap to FTTP, which was the revolution in telco called VOIP. Verizon was content to be a second-rate player in broadband as long as the cash was gushing in wireless and wireline business. The ONLY way to stop the losses was to revolutionize the network in the last mile. One thing not in Verizon's corner when it comes to the FTTP game is THEY are out in front of all providers with the largest residential FTTP network in the nation (meaning it costs a bundle to deploy). While that gives them some props with customers, it gives little with shareholders and vendors which until the business model comes more into focus involves large RISK and UNCERTAINTY.

Which is the bigger problem from a subscriber viewpoint?
Larger cable-tv bills or larger internet/phone bills?
Until recently, cable companies have had the customers and overall value in their corner but are not blind to the kind of threat a superior network represents. I'm still at a loss to see why Verizon can't beat the cable companies at their own game, by creating "verizon branded" tv networks which would be exclusive to verizon (at first) and use them as a negotiating tool to rip the cable company's momentum away from the big 4 crop of premium networks (hbo, showtime, cinemax, starz) while pricing the channels at a fraction of what these networks charge... thus throwing down the gauntlet with the same flair voip networks do for voice.

FIB3RTECH

@charter.com

Re: Copper proven wrong, time and again

I can say that by running fiber they will not need to do a rebuild for then next 20yrs+. So the initial cost may hurt their stock because of the cost to deploy the latest technology.

In the long run they will save money on network maintenance, manpower and be able to ad new services without having to do any outside plant upgrades.

I think Verizon has deep pockets and will be able to take a hit in wallet until this FiOS project is complete.

nixen
Rockin' the Boxen
Premium
join:2002-10-04
Alexandria, VA
·Cox HSI
·Speakeasy

Compete Against Who?

Remind me again what territories Verizon is competing directly against AT&T or other telcos?

As to cable HSI? Well, FTTH, unlike xDSL, means that they can sell new bandwidth tiers, on-demand, that will always be as fast or faster than cable HSI. And, as cable feels the need to dial-up their speeds, so can Verizon, but without having to build out new physical plant.

-tom
--
"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficial. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well meaning but without understanding." -Louis D Brandeis

rf_engineer

join:2003-08-04
USA

One Simple Saying

I can't remember who originally said this, but "no pioneering decision was financially justifiable at the time it was made."

Yauch

join:2005-06-24

Roflcopter

Of course it won't fail. If there's one thing I've learned from the forums on this site is this: If your using cutting edge technology, business plans and feasibility and ROI don't matter. We would buy the product, and obviously we represent the average consumer.

CableTool
Poorly Representing MYSELF.
Premium
join:2004-11-12

Re: Roflcopter

said by Yauch See Profile :

We would buy the product, and obviously we represent the average consumer.
No way in hell does this forum represent the average consumer.
--
CableFAQ.org

|_Technicians Unplugged

Fatal Vector

join:2005-11-26

Re: Roflcopter



The average GEEK consumer.

whataboutd

@grandenetworks.net

an inside perspective

I was able to hear a so called "state of the union" from a regional manager quite high up the food chain. He said the main concern coming from investors at this point was not so much the cost to deploy the fiber network, but the cost of installation. Currently verizon is spending $800-900 per installation (down from about $1200-1300). But their ultimate goal is closer to the $500-600 mark. With upcoming changes to the ONT (specifically the 612 with built in moca) that number should start to creep down.

Rob A
Jets AFC Championship
Premium
join:2005-01-17
Pompton Plains, NJ

Fios will dominate

Unlimited speed, crystal clear picture and sound.

batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ
clubs:

Kill Verizon?

You people thought you killed Ma Bell back in the 80's didn't you? You thought the MCI/WorldCom were the companies of the 21st century............
BWHHHHHHHHHHHHHHHHH HA HA BWHHHHHHHHHHHHHHHHHH.
FightingBlue

join:2006-04-08
Warsaw, NY

Penny wise, pound foolish.

Yet again the pundits and investors prove that the only thing that they care about is the six month profit outlook. Verizon commits to rolling out a network that would pretty much dominate the telecom landscape, hugely outdistancing AT&T (which isn't going to have the bandwidth for serious IPTV), the cable companies, and any available DSL solution, and the only thing that the parasite class can say is that they're spending too much money. God forbid that a company actually invest in the future ahead of time, rather than having to be dragged kicking and screaming a few years from now, at which point it would probably cost two or three times as much between lost sales and increased haste.

I'm no fan of Verizon, but even I recognize that they've made the right move by establishing an infrastructure with nearly unlimited bandwidth for the future. It seems that investors on the other hand would rather gorge themselves on a high share price even if it means the company turns into the next Kodak a few years from now.
Forums » Critic: Fios Risk May 'Kill' Verizonpage: 1 · 2


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