Cable Tech

Tracking Verizon's FTTP Progress

Verizon Communications Inc. (NYSE: VZ) may have missed one of the most widely discussed milestones in the world of access communications last year: its goal of passing 1 million homes with its fiber-to-the-premises (FTTP) network by the end of 2004 (see Verizon Flaunts Fiber Plan).

The analysts at UBS Investment Research, in a note issued late last week, say they think the nation's largest phone company fell short of its mark. "While we believe the company fell short of meeting its previously stated goal of passing 1 million homes by the end of 2004, it appears to be aggressively moving towards its goal for 2005," the analysts wrote.

That's not to say Verizon is slacking off its FTTP plans. The company expects to pass a total of 3 million homes with FTTP by the end of 2005. But the question does raise a legitimate question: How would anybody really know if it made its goal or not?

Verizon began building its FTTP network last year in parts of California, Delaware, Florida, Maryland, Massachusetts, New York, Pennsylvania, Texas, and Virginia. Last week, the company announced plans to construct its FTTP network in Rhode Island and parts of Indiana (see Verizon Expands FTTP Plan and Verizon Rolls Out Its Fiber).

Indeed, the carrier's march to deliver triple-play services has noticeably strained its primary FTTP equipment supplier, Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA). Because of Verizon's aggressive schedule, Tellabs recently bought optical network terminal (ONT) supplier Vinci Systems as a way of bringing down its costs to deliver FTTP equipment (see Tellabs Vacuums Up Vinci).

Verizon says it can't confirm that it made or missed its 1 million home goal just yet. "We're finishing tabulating [numbers] for 2004 and expect to report on some results when we do our quarterly [and] annual earnings statement… " writes Mark Marchand, a Verizon spokesman in a response to an inquiry from Light Reading.

The company won't provide specific subscriber numbers to its FiOS service yet. But it does note that the response has been good. In Keller, Texas, Verizon says it has more than doubled its broadband subscribers (including DSL and FiOS subcribers) during the company's first four months of "proactive marketing" (see Picnic Marketing). Verizon reports earnings on Jan. 27.

— Phil Harvey, News Editor, Light Reading

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