Verizon’s Bets Big on Fiber-optics

April 22, 2007 at 6:44 pm | Posted in Assignment | 11 Comments

The Future of Landline Telecom – Verizon’s $18 Billion Bet on Fiber-optics 

It’s only been 4 years since the CEO of Verizon, Ivan Seidenberg, said that Verizon was committed to creating the network of the future and less than 3 since initial construction began in
Keller, Texas.  To many people Verizon is a wireless company but, historically speaking, it has its roots in the twisted copper pair of wires that through most of the 20th century was the principal means to make voice calls.  About 20 years ago, wireless began to emerge as the next technology to be embraced for making voice calls due to its mobility capability for consumers.

In 2000 when Verizon and Verizon Wireless were created, the handwriting already was on the wall as new wireless technologies – including the nascent wi-fi that carries data –  began to replace the existing landline phone.  It also wasn’t long after that when VoIP and cable phone emerged as additional alternatives to the landline phone.  At the same time, consumers and marketers began to find a nexus in so-called ‘bundles’ for services.  Initially, this included steep drops in the price of long-distance service and broadband service.  Within the past 5 years, TV service and wireless service have been added to this picture.

So, what does this mean to Verizon and to traditional telephone companies?

  • Line loss that is accelerating due to competition and the fact that the next generation of consumers doesn’t use a landline voice phone.
  • The need to bundle service packages that include both broadband and video, particularly as there is a migration to digital and high definition TV.
  • Providing broadband-only options that do not include voice service for those who want it or price voice service low enough to compete with VoIP.

Since the company began its fiber-to-the-premises (FTTP) build in 2004 it has now crisscrossed a large swath of states and passed more than 7 million homes to date with an expected 18 million or more to be passed by the end of 2010 at a net cost of $18 billion.

What value does this fiber-optic network have for the consumer?

  • A fiber-optic connection directly to the home that offers exceptionally fast download and upload  broadband speeds starting at 5mbps/2mbps and capable of virtually unlimited speeds in the future.
  • Unparalleled video/TV display, channel lineup and widgets.
  • A competitive price point to existing cable company service bundles

PROPOSED WEBSITE LAYOUT

First Page  Changing consumer behavior (consumer photos – wireless, wi-fi) 

Verizon’s Challenge –

Washington
State (landline loss graph)

FTTP photo (fiber-optic cable lit up)

Second Page 

Verizon executive comments (photo)

Employees at work  (photo)

TV customer comment (photo)

Broadband customer – probably a gamer – comment (photo)

Third Page 

FiOS capabilities video 

Service price/comparison graph

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11 Comments »

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  1. I will be interested to see you site haven’t thought about this much. But then you probably don’t think about journals either. I have a question about your second page. I understand that it will have comments from said individuals but are they commenting on the proposed capabilities or the status quo or both? Enteresting

  2. […] Kevin – Group 4 […]

  3. very informative 🙂

  4. Ooooo oooo ooo Pick me for the gamer! me me me!

  5. does it have to be a verizon broadband customer?

  6. I think this is a good idea as far as a project goes but i think in order to make kathy happy you will really have to emphasize change. the change in consumer behavior and how to get the consumers to change is more important here i think.

  7. Kevin – who is the audience for this information?

    It’s an interesting mix of technical and personal. I think anything that can explain the business of cellphones in “English” will be helpful to the general public — and create goodwill (not unlike Patagonia’s environmental activism)

  8. p.s. for the ignorant 😉 please define all acronyms – thanks!
    Having a historical timeline can show the change visually!

  9. If you could, I think following where the fiberoptic network has been lain over the past few years with a geographic visual would be a grabbing, informative staple – the timeline in laying these may offer the opportunity to discuss how dependent(or?)independent emerging digital innovation is apart from a specifically fiberoptic support network. Is one very much behind the other?

  10. Blogs In My RSS Reader

    […] Later on I learned that this wasn’t exactly true. […]

  11. As a consumer (or rather potential consumer) I would be interested in a price comparison chart though the challenge of this might be trying to compare apples to apples with all the options available such as bundling, broadband, various coverage areas, etc.

    I like your ideas for graphs. Even though everyone has a phone of some sort and most people have Internet access of some sort, I think the details can be overwhelming sometimes. The graphs would give people who don’t know much about the topic an entry-point into the story.


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