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Verizon Nearing End Of Plans To Build FiOS Network

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Verizon may brag -- a little too much -- about its customer satisfaction stats, but what do those numbers mean when the company won't build out its network to reach new customers?

Verizon may brag — a little too much — about its customer satisfaction stats, but what do those numbers mean when the company won’t build out its network to reach new customers?



Are you like a lot of people in this country — You want to change your broadband provider but you can’t because the only high-speed option in your town is your cable company? Maybe you’ve been holding out hope that Verizon will bring FiOS to your town so that you’ll at least have something that resembles a choice. We’ve got bad news for you, the company says it’s getting to the end of its current plans to build out the FiOS network.

This is according to Verizon Chief Financial Officer Fran “Whammo” Shammo (who recently declared that the company will not get into that rollover data trend that’s all popular with kids today). Speaking to investors last week, the Great Shammo made clear the company’s plans to invest its money in its wireless business.


“I have been pretty consistent with this in the fact that we will spend more CapEx [capital expenditures] in the Wireless side and we will continue to curtail CapEx on the Wireline side,” he explained. “Some of that is because we are getting to the end of our committed build around FiOS, penetration is getting higher.”


This doesn’t mean that Verizon is abandoning FiOS; just that you probably won’t be getting access to it in your town if you don’t already have it.


FiOS brought in $3.3 billion to Verizon last year, an increase of 11.6%, and now accounts for 77% of the company’s wireline revenue. And it will likely continue to bring in more money and, more importantly, make more of a profit because Verizon won’t be spending money to build out its network.


“We are reconnecting homes that we’ve already connected, so it’s not additional capital that we have to outlay,” said Shammo. “That is a very good return for us because we already spent the capital to connect that home.”


Shammo’s comments did not go over well with the people of New Jersey who maintain that Verizon has bailed on a 22-year-old agreement with the state to build out broadband digital service to 100% of the Garden State.


Even though FiOS is sometimes viewed as a national competitor to the likes of Comcast, Charter, Time Warner Cable, who have near-monopoly control on high-speed broadband in most of the areas in which they operate, it currently only has 6.6 million broadband customers and 5.6 million pay-TV subscribers, significantly fewer than those other major ISPs.


The FiOS network itself only reaches a total of 19.8 million premises, which means there is a lot of room for the company to acquire new customers, but also means that even if it signed up every possible person to FiOS, it would still be smaller than Comcast.


UPDATE: A rep for Verizon tells Consumerist that the original plan for FiOS was to build out the network beyond 18 million premises, which as we noted above they have by 1.8 million.


The rep claims that it was this goal that Mr. Shammo was referencing in his recent comments.


“That number by the way continues to creep upward as we build out metropolitan areas like New York city, Washington, D.C., Pittsburgh and Philadelphia plus a few other smaller cities,” adds the rep.


[via Ars Technica]




by Chris Morran via Consumerist

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