Verizon touts advantages of FTTH over cable in new ad on eve of consolidating wireline footprint
Verizon (NYSE: VZ) has begun running a new TV ad campaign highlighting the difference between its FTTH network and cable, a move that comes as the service provider pares down its wireline network footprint to the Northeast.
In the ad, the telco talks about how it can deliver symmetrical speeds from 50 Mbps up to 500 Mbps. While Verizon has yet to take the 1 Gbps plunge, being able to provide symmetrical speeds within these ranges means the telco can stay competitive against cable in the markets where it has built out FiOS.
One of the highlighted symmetrical products is a new triple play bundle of 100 Mbps symmetrical Internet, TV and phone service for $69.99 a month for the first year.
Despite the compelling price point -- which is only good for a year -- eligible customers have do have to dole out money for some fees.
A Verizon spokesman told FierceTelecom that its standard set up fee is $80, and there is no charge if you order online. If a customer wants Verizon to move their cable outlet, wire new rooms, change their wiring the set up charge is $150. Also, if a customer opts to install the service themselves, Verizon will not charge the customer anything.
Regardless, in the near-term the symmetrical speed offering could give Verizon a leg up on cable operators in its FiOS territory. Today, cable operators' HFC and DOCSIS-based networks don't allow them to deliver symmetrical speeds. However, cable operators like Comcast (NASDAQ: CMCSA) have begun to offer a mix of premium 2 Gbps over a FTTH architecture and now 1 Gbps services via DOCSIS 3.1 in select markets.
Comcast, which is currently conducting a deep field trial in Atlanta, will likely take the DOCSIS 3.1-based service into the Northeast at a later point. Although details aren't available about how wide their deployment will be, a company executive did confirm during a fourth-quarter 2015 earnings call that Comcast will be rolling out the service throughout a large part of its cable footprint.
What's interesting about the ad is that it comes as Verizon gets ready to divest its wireline properties in California, Florida and Texas -- three markets where Verizon's FiOS network was well penetrated and profitable. Upon completion of this deal, Verizon's wireline and FTTH network will be mainly relegated to the East Coast.
However, the service provider remains confident that that footprint will enable it to compete effectively with cable.
Fran Shammo, CFO of Verizon said during the fourth quarter 2015 earnings call that on the "East Coast, we'll have covered over 70 percent of the footprint with our FiOS product and we're very committed to it."
And while Verizon has no near-term plans to extend FiOS to any new Northeast markets, the service provider will be able to leverage and extend the fiber it built out already. Because the telco will be able penetrate either existing homes that churned to cable or others that are passed by the fiber it won't have to increase capital spending on its FTTH footprint.
All of its offers may look great on paper, but the reality is it's only applicable to consumers that are lucky enough to reside in the FiOS footprint.
Verizon connected over 20 million homes with FTTH, surpassing its 18 million goal. Still, a number major of cities and towns such as Boston, which recently launched a campaign to entice the provider to build in their city, will likely never see the benefits of the FTTH service.
- see the release
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This article was updated on March 28 with additional information from Verizon.