Jan 4 2008 8:59PM GMT
Posted by: Tom Nolle
Ip/tv,
Broadband,
Optical Networking,
Cable,
IP services,
Triple play services
Verizon’s FiOS plans in 2008 include obtaining some franchises in major metro centers and increasing its HD channel count to 150, both of which are likely to cause further angst for the cable companies. In the former area, Verizon faces the issue of efficient delivery to multiple dwelling units (MDUs), a technical step that it’s been working to resolve through the use of in-building fiber or MoCA cable. The latter step is simply a matter of getting the business relationships in place, since FiOS has ample capacity to deliver virtually any number of HD channels. The current Comcast-satellite war over who has the most HD will be moot when Verizon gets its full complement of channels. All of this will be fueled in part by the digital transition that is scheduled for mid-2009. The coupons for customer conversion for over-the-air sets limited to analog tuning will launch shortly, and the campaign to prepare the market is expected to create a major surge in HDTV sales in 2008 and 1H09, making the question of who has the most HD channels an important marketing point.
Dec 24 2007 2:35PM GMT
Posted by: Tom Nolle
Ip/tv,
IP services,
Triple play services
AT&T is rumored to be considering a revamp of the BellSouth FTTC strategy, based on Tellabs, in favor of an FTTC/FTTP strategy based on Ericsson. Ericsson had, via its Marconi unit, a history with BellSouth’s fiber plans and there is some sign that the carrier is now breaking its original plan to have a uniform infrastructure in favor of a more regionalized approach. We have noted in the past that BellSouth’s internal review of fiber options prior to the merger had favored a Verizon-like plan, and this may be an indication that AT&T will now consider that for at least that region. We also believe AT&T may consider broader FTTH deployment and also the Verizon linear RF approach to broadcast.
Oct 29 2007 1:48AM GMT
Posted by: Tom Nolle
Triple play services,
Optical,
Broadband,
Messaging
Verizon reported earnings that were higher than expected, but not a blow-out. The most interesting numbers released were for FiOS, which added over 200,000 customers in the quarter and is now approaching the three-quarters-of-a-million mark. And, like AT&T did earlier, Verizon is showing off some strategies that it hopes will expand not only its FiOS offering but also transform its revenue model overall. In fact, we think Verizon’s stuff might be more interesting in this latter zone than AT&T’s was. An example is Verizon’s desire to broaden text messaging from the mobile SMS framework of today to a user-centric and virtually universal service, blurring the boundaries between instant messaging and SMS forever and presumably increasing the appetite for both. The strategy would be smart because of points made in earlier entries here; mobile data services in general have not taken off in many markets except in the youth sector. Since IM is popular with business users, Verizon hopes that creating “IM FMC” it can broaden the use of mobile services for things other than voice. Verizon has a similar strategy in gaming, where it plans to have a hosted game set that can be played at home, from a laptop portably, or from a mobile device. Finally, Verizon plans to introduce much more proactive home network management, for the user themselves through automatic discovery and linking of compatible devices and for the operator through TR-069 to provide delivery management for high-value services. Verizon’s spend per FiOS customer is in excess of $800, and so the company is eager to find new ways to create revenue from those users.
Oct 24 2007 2:08PM GMT
Posted by: Tom Nolle
Cable,
Broadband,
Triple play services
Verizon will be making a symmetrical version of broadband available to consumers at a very reasonable price in a move that seems certain to be a slap at the architectural limits of cable broadband. The FiOS symmetrical offer will provide 20 Mbps in both directions for $65 per month, according to AP reports, for customers with an annual phone contract. The reason this is likely to cause angst in the cable world is that cable broadband cannot offer that kind of uplink speed at all without moving to a completely new plant architecture at considerable cost. It’s also true that AT&T’s U-verse architecture can’t match this service. Verizon, by eliminating restrictions on the uplink data path, could well create a market for consumer videoconferencing and P2P that would be nearly impossible for competitors to match.
Oct 11 2007 8:58PM GMT
Posted by: Tom Nolle
Telecom,
Triple play services,
Cable,
voice
Business Week and S&P are now publishing reasonable analysis of the cable/telco competition. The recent work concedes that cable will likely take some market share from the telcos in voice services, but that telcos will take share in both data and video services. As we’ve said many times, it’s better to be stealing customers with high ARPU than those with lower ARPU, and wireline voice services are clearly not going to be profitable for long, as Skype and Vonage show. Another problem for the cable operators is that the competition with satellite and telco video will likely force them to increase capex and reduce pricing. The current cable voice popularity is driven in part by bundle pricing that the cable companies had hoped to raise at the end of the contract, but it seems likely that such a move will not only increase churn but also create media awareness of the relatively high cable voice cost. Finally, fixed-mobile convergence is now arriving with bundled wireline/wireless services from AT&T and Verizon, and it’s likely that both companies will soon introduce active convergence at the feature level. This will force the cable companies into either partnership (which is what Sprint hopes) or capitalization of their own mobile services. Either way, their ROI will suffer.
