Verizon’s fiber service shows early success

Verizon, the telco that is building the first all-fiber network in the United States, has signed up its one millionth FiOS Internet customer and now has almost 500,000 FiOS TV subscribers, Verizon CEO Ivan Seidenberg said last week.

Speaking at the NXTcomm in Chicago, Seidenberg predicted in his keynote speech that Verizon would likely add about 200,000 net additions to the fiber network in the second quarter of 2007. “Adding more than 100,000 subscribers in a quarter is impressive for any industry,” he said. “And Verizon is probably going to do double that this quarter. It’s crazy.”

The FiOS fiber network, he said, has transformed Verizon’s business. “Five years ago, Verizon had 1.6 million broadband customers,” Seidenberg said. “Less than 10 percent of telcom revenues came from data. Today, we have over 7 million broadband customers, hundreds of thousands of video subscribers and for the first time in a long time, consumer revenue is growing again.”

Verizon has been deploying its all-fiber network for the past three years. The network takes fiber directly to the side of a subscriber’s home. It provides near-limitless bandwidth that can be used to deliver a triple play of services including high-speed Internet connectivity, telephone service and video. Verizon already offers Internet service that runs at 50Mb/s, while now testing service at 100Mp/s.

AT&T, another major telco entering the video arena, opted not to take fiber all the way to the customer’s home. It relied on IP video technology, still unproven as a mass delivery system.

The choice of IP technology has slowed AT&T’s expansion plans. In the IP environment, AT&T is limited to delivering to subscribers only a single HD video channel at a time. So far, the telco has signed about 40,000 customers to the new network.

In 2004, when Verizon began deploying FiOS, critics said that the budgeted $18 billion cost it would take to dig up streets and hang fiber from utility poles made the initiative too expensive and too risky to be profitable.