Verizon challenges cable's SMB play with FiOS skinny video bundle

Verizon (NYSE: VZ) is taking aim at cable's growing presence in the small to medium business (SMB) market by extending its new FiOS Custom TV service to local businesses that reside in its fiber-to-the-premises (FTTP) footprint.

Similar to the consumer segment, the FiOS Custom TV product allows businesses to choose the channels that they want and pertain to their clientele. The telco has created packages that have programming directed at specific audiences, such as children at a pediatric office or employees at a financial services firm.

A local pediatrician's office could offer its young patients the Kids channel pack, along with the News and Information pack for their parents. Likewise, a financial services firm that wants its employees to stay up on Wall Street's daily activity can choose the News and Information channel pack, along with the Lifestyle channel pack so they can scope out their next vacation destination.

Business customers that sign up for FiOS Custom TV get 34 featured base channels, plus local broadcast channels, and at least two genre-based packs of channels out of a choice of seven.  Customers also have the option to select additional channel packs for $10 more each per month (a Regional Sports Network fee applies if the Sports Plus genre pack is chosen or added). 

Offering the so-called skinny video bundle to SMB makes sense for Verizon on a couple of levels.

For one, it can build on the momentum it already has with SMBs, particularly those that are existing FiOS customers or ones that are in the FTTP footprint that have decided to upgrade from DSL or cable. Verizon can also build upon the momentum it created with the symmetrical Speed Match FiOS data offering that it extended to SMBs last September.

When it introduced the SpeedMatch service for SMBs, the service provider increased the speeds of its six main tiers for FiOS business customers: 15/5 tier jumps to symmetrical 25 Mbps; 50/25 is now symmetrical 50 Mbps; 75/35 is now symmetrical 75 Mbps; 150/65 is now symmetrical 150 Mbps; 300/65 is now symmetrical 300 Mbps, and 500/100 is now symmetrical 500 Mbps. 

At the same time, Verizon can effectively add another arrow in its quiver to battle cable operators like Comcast that have been aggressively moving into the SMB space with a mix of high-speed data, voice and their bread-and-butter video service. During the first quarter, Comcast reported that business revenues rose 6.3 percent year-over-year to $11.4 billion, for example.

However, it appears that the Custom TV service isn't without its flaws. According to a FierceCable article citing a Consumer Reports column, one customer said that despite the $30 savings it would gain, it meant giving up a number of other channels.

For more:
- see the release

Related articles:
Verizon FiOS 75 Mbps Quantum adoption rises amidst Q1 wireline revenue decline
Verizon's skinny bundle porks up fast with add-ons, Consumer Reports finds
Verizon's FiOS growth continued to cushion the blow of wireline revenue declines in Q4
Verizon's McAdam: Some wireline assets would be better off in someone else's hands
Verizon's enterprise weakness is offset by FiOS revenue strength in Q3

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