Verizon says it saves more than 60% by converting copper to fiber

Verizon (NYSE: VZ) is seeing savings of 60 percent and greater from transitioning copper plant to an all-fiber network, said Sampath Sowmyanarayan, Verizon's senior vice president of transformation, while speaking at the Genband Perspectives 15 conference last month.

Specifically, Sowmyanarayan said that Verizon is saving real estate costs of 60 to 80 percent, dispatch savings of 60 percent, energy and maintenance savings of 60 to 80 percent and capex savings of 10 to 15 percent, while new revenues associated with an all-fiber network account for roughly 60 percent of the total value of the transformation.

The price of fiber and electronics associated with FTTP have declined in recent years and the combination of higher service revenue and reduced costs is prompting many companies to deploy FTTP.

In recent days, Hawaiian Telecom said it was deploying fiber to 96,000 locations. In addition, Cincinnati Bell has deployed fiber to 358,000 locations, while CenturyLink (NYSE: CTL) has deployed fiber to 390,000 businesses and 360,000 households. TDS is planning to deploy fiber to 25 percent of the households in its footprint by year-end.

Verizon has made FiOS, its FTTP offering, available to roughly 20 million households, mostly on the East Coast. However, AT&T (NYSE: T) has primarily chosen a different path, making fiber-to-the-node (FTTN) services, sold under the U-verse brand, available to more than 28 million homes, while making GigaPower FTTP services available to a much smaller number of homes in 10 markets. FTTN costs less to deploy and provides much slower speeds than FTTP, but FTTN is usually adequate for video services.

Google's rollout of FTTP has generated a great deal of publicity for FTTP. Google (NASDAQ: GOOG) currently lists Kansas City, Mo.; Provo, Utah and Austin as cities with FTTP, with Atlanta, Nashville, Charlotte, Salt Lake City and Raleigh-Durham, N.C. listed as markets with upcoming FTTP deployments. Many of these markets are also AT&T GigaPower markets and some observers believe that pressure from Google Fiber has led to some of these GigaPower deployments. AT&T executives have commented about taking advantage of favorable terms associated with Google Fiber rollouts.

Cable companies, such as Comcast (NASDAQ: CMCSA), are beginning to get into the FTTP game as well.  Comcast is planning to roll out FTTP in a variety of markets beginning in June.

Even C Spire, a regional wireless carrier that competes across most of Mississippi, is making FTTP available in select markets in the Magnolia State.

As noted recently in FierceInstaller, the Rural Utilities Service of the U.S. Department of Agriculture in recent years has awarded more than $3 billion in broadband funding for 297 infrastructure projects, with a requirement that most of these be completed by June 2015. Many of these are in rural America.

Google is leading the way in building awareness of FTTP, but many companies--motivated by cost and revenue considerations--are doing the hard work of making FTTP broadly available.

Related articles:
Hawaiian Telcom to deliver 1-Gig service to Hawaii
CenturyLink's 1 Gbps availability drives consumer awareness, purchases of higher legacy speed tiers
Cincinnati Bell passes additional 22K addresses with fiber-based Fioptics service
TDS's 1 Gbps buildout plan to 25% of network drives users to higher speeds
Comcast pushes back heralded 2 Gbps fiber-to-the-home rollout
Clinton, Miss., qualifies for C Spire's 1 Gbps FTTH service
Ohio electric cooperative will deploy fiber to school districts and businesses

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