Verizon Communications (NYSE: VZ) is handling about 300,000 conversions from copper to fiber per year but it still has about 1 million homes left to convert to fiber before it wraps up its entire conversion plan that it has been working on for three years, said a top company executive today.
Speaking at the Oppenheimer 17th Annual Technology, Internet & Communications Conference, Fran Shammo, Verizon's CFO and EVP, said that he expects it will take at least another 18 to 24 months to complete that transition to fiber and that cities like New York City and Washington, D.C., will take a very long time to convert to fiber because of the legacy copper plant that is there.
Shammo added that the company has about 10 switches in its portfolio that it plans to take out of service, noting that it's a long process because many enterprise customers have features in the legacy system that they cannot get on IP. However, he said that there are many more features that they will have on the IP network once they make the transition. "We are working with them to convert. This has to be gradual," Shammo said.
The company also is seeing an increase in revenue from the customers that have made the conversion to FiOS. Shammo said that many customers are increasing their broadband speeds once they are on the FiOS network and generating from $13 to $15 more per month in revenue for the company.
Shammo said that the company is seeing an increase in demand for Ethernet, particularly on the wholesale side, where its seeing a lot of demand for fiber to the wireless cell sites.
Interestingly, Shammo said that Verizon is interested in selling off non-strategic parts of its business. "We will look at non-strategic assets to spin off," he said. "Everything is on the table."
However, he said the company is not currently looking at a REIT structure similar to Windstream. Windstream recently announced it would spin out certain assets, including its fiber and copper networks and other real estate, as a REIT.
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