A top Cincinnati Bell executive said that while providing a 1 Gbps fiber-to-the-home (FTTH) service is a logical evolution of its broadband service regime, the service will initially resonate with a small part of its customer base.
Speaking at the UBS Annual Global Media and Communications Conference, Cincinnati Bell's CFO Leigh Fox said that the company's 1 Gbps offering is more of a way to drive awareness about higher broadband speeds and evolution of its brand.
"I don't think most consumers really understand what a Gig gets them versus a 50 Mbps pipe," Fox said. "There are some technology savvy consumers out there that do understand that and we do have a few that have caught onto the 1 Gig and it's resonated with them, but it was really more of a marketing play to change how the consumers view us as a company."
Today, the majority of Cincinnati Bell's customers are purchasing dual- and triple-play bundles that include 20 Mbps connections. This is up from the 10 Mbps it saw most of its customers ordering just a year ago.
"From what we're seeing customers want, I would have said from a year ago is that 10-20 Mbps is increasing slowly over time," Fox said. "If you look at what we're bundling into our bundles, it's now 20 Mbps."
Given the growth of new devices in the home and speed options, Fox said that when users access applications over their broadband connection, they are less tolerant of any buffering or slow response times.
"Because of the proliferation of speeds, people are starting to realize that three years ago when you saw things start to queue up, it was OK," Fox said. "Now that you have gotten a better experience as things become more intensive when you see things queue up, you're less tolerant for things like that."
On the overall FTTH buildout front, Cincinnati Bell continues to make progress in getting its Fioptics service to more customers.
The overall goal for Cincinnati Bell will be to have 75 percent of its serving area addressed by FTTH and the remaining 25 percent served by a hybrid copper/fiber fiber-to-the-node (FTTN) offering.
"Ideally, we'd like to deliver fiber-to-the-home everywhere, but in some cases it does not make sense and in other cases the copper plant is good," Fox said. "Ultimately, I would see a world [where] you migrate to your node areas as long as it's cost effective and there's space in the CO."
Thus far, Cincinnati Bell's bet on FTTH continues to pay off.
In the third quarter of 2014, Cincinnati Bell's Fioptics service suite totaled $37 million, up 39 percent year-over-year. During that period, the telco continued to expand the availability of Fioptics, passing an additional 15,900 homes, and it is now available to 40 percent of Greater Cincinnati.
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