Verizon to spend nearly $23 billion on fiber network

Verizon Communications revealed last week what it was spending approximately $22.9 billion to build its new FiOS fiber-optic network.

The all-fiber network replaces Verizon’s copper wire infrastructure, now providing the bandwidth for the telco to deliver ultra high-speed Internet connections and new video services to 18 million of its customers.

Verizon noted that the fiber infrastructure has many benefits compared to copper, one of which is lower maintenance. The company said it expected to offset the network deployment costs by saving nearly $5 billion in maintenance costs through the end of the decade.

The telco is also optimistic that customers will rapidly sign up for its new services. It predicted up to 4 million TV subscribers and up to 7 million Internet users by the end of 2010, and a positive operating income from FiOS beginning in 2009.

Verizon launched the fiber-optic effort in 2004. Skeptics question whether it can ever become profitable competing with existing pay TV operators in the 28 markets where it sells landline services.