Verizon FiOS Expansion remains in a Holding Pattern
Consumers waiting on the Verizon FiOS expansion coming to their city need to remain patient. This bundled communications service, featuring High Speed Internet, Home Phone, and Digital TV, continues to earn accolades for its overall high quality and fast Internet speeds, but Verizon’s lack of investment in FiOS has kept its subscriber base steady at around 5 million users. Future expansion hopes remain up in the air, arguably because of Big Red’s focus on its more profitable wireless business.
If you live in an area with Verizon FiOS, congratulations, as the service offers a robust collection of Digital TV channels, combined with competitive phone and Internet options. If FiOS hasn’t yet arrived in your location, waiting for a Google Fiber installation might be a better bet. Let’s take a closer look at why the Verizon FiOS rollout remains stalled.
Verizon Focused on Expanding Service in Existing FiOS Markets
Late last year, Verizon’s CEO, Lowell McAdam, essentially sounded a death-knell for Verizon FiOS expansion into new markets, commenting that the company would rather focus on expanding FiOS availability in metropolitan areas that already have the service. As mentioned earlier, the company’s wireless service is more profitable, and it doesn’t come with the capital investment required to install fiber optic cable.
Verizon also hopes to partner with local service providers instead of putting their own shovels in the ground, so to speak. “More and more things are going mobile and I think there are more opportunities to partner out of market with companies that are there vs. us going in and deploying FiOS, ” said McAdam. This puts Verizon at a distinct disadvantage compared to AT&T which can leverage its local franchise agreements to facilitate the rollout of its own communications packages, like U-verse.
Big Red is successfully adding FiOS customers in markets that already have the service; the state of Texas being one noticeable example. Verizon reached the 50 percent penetration point for FiOS in Texas, at the end of last year. This growth in subscribers was largely driven by the availability of High Speed Internet service with speeds up to 300 Mbps and 500 Mbps, which is frustrating for Verizon Internet users still without FiOS in the more “bandwidth-challenged” regions of the country.
Pairing Verizon FiOS with a Wireless Service May Be the Future?
McAdam seems to have a vision of Verizon customers leveraging Big Red’s services both at home in a “wired” fashion and on their mobile devices when on the go. At that point, does Verizon FiOS simply become a brand name instead of a discrete fiber-delivered communications service to the home? That might be a strong possibility, given Verizon’s apparent distaste for investing in new fiber-optic cable installations to open today’s FiOS to new markets.
Combining the house and mobile FiOS experience for consumers appears to be the way to go for McAdam. “That’s the next wave of penetration for both, ” he said. Once again, this may hint that FiOS would continue more as a brand instead of a discrete service.
Fiber Optic Cable Installation Remains Too Costly
The bottom line is that Verizon gets a quicker bang for the buck from its wireless service when compared to the return on investment for a new FiOS installation. That basic fact continues to keep further Verizon FiOS expansion on the backburner short of the company partnering with local providers who already have wires in the ground, as McAdam hinted at in December of 2013. Company CFO, Fran Shammo, earlier this year mentioned that once FiOS has paid off the initial investment, Verizon will look at expanding FiOS to new markets.
So if Verizon FiOS is already available in your area, but just not on your street, chances are good you can get the service sooner than later. If you are stuck in a location without any FiOS, you may be waiting a long time before Verizon feels it is profitable to expand fiber to new metropolitan areas. Stay tuned.
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