Today's Top Stories Fran Shammo, CFO and VP of Verizon (NYSE: VZ), said that if customers want their FiOS Fiber to the Premises (FTTP), they should pay a premium.  | | Shammo (Image source: Verizon) | Looking to up the revenue gain it gets from FiOS, the service provider increased prices on its FiOS service in the second quarter, a trend that Shammo reiterated will continue into the third quarter. "On the revenue side of the house, we really concentrated this year on getting our price points equivalent to where the rest of the market was," he said. "We were actually underpriced with a superior product to cable so the concerted effort was to do some price ups that will continue into to the third quarter." Beginning in the first quarter, the price increase effort has begun to pay off in terms of increasing FiOS profitability in the second quarter. Verizon reported that it had a 2.5 percent mass market revenue increase during Q2. One of the other notable changes with FiOS in the recent quarter was that it had a significant speed increase on a number of its key data tiers and introduced a new 300 Mbps tier. The service provider increased the speeds on three of its current levels: 25/25 increased to 50/25; 35/35 climbed to 75/35 and 50/20 rose to 150/65. A new speed tier, 300/65, doubles the current 150/35 top tier. As part of its move to increase profitability of its FiOS service at a time when its DSL subscriber base continues to defect to cable in areas where the FTTH service is not available, the company began migrating some customers over to the fiber service. "We are really on a concerted effort to really spend our capital and our dollars more efficiently from getting people off the copper network and onto the FiOS network," Shammo said. "You have probably seen us shift a little bit between going after our growth adds and mining our base." Shammo added that it gets two benefits from mining that existing copper-based broadband customer base. First, a copper customer who is classified as a "chronic customer"--who has two truck rolls to service the copper line during a six month period--will have those on-site service calls minimized by moving to FiOS.
"When you think about this customer, that's four truck rolls a year, and I am losing money on that copper customer," Shammo said. "If I can take that chronic customer and move them to FiOS, I deplete the amount of operational expense to keep that customer on and they get the benefit of FiOS Digital Voice, which is clearer, and put their DSL service onto a FiOS Internet where they realize the FiOS speeds." The second benefit is that Verizon is seeing voice and DSL customers bundle more FiOS services. "What we are seeing preliminary is that even if we take a voice and DSL customer and move them, they are starting buy-up in bundles because they are seeing the value of the higher speeds," Shammo said. "Then, we open up the sales routine to go after them for the FiOS TV product." This effort in the near-term may have had a negative effect on how many subscribers Verizon added in the second quarter, among other reasons. During the quarter, the telco reported that video subscribers grew by just 120,000 compared to 184,000 a year ago, while data subs were up 134,000 compared to 189,000. Both video and data subscriber numbers fell below market and Verizon projections. At the same time, non-FiOS residential connections declined 199,000 in the quarter which, while a 6.6 percent decline, represented an improvement over the 240,000 line loss posted last year. For more:
- hear the webcast (sub. req.) Download our eBook: Finding New Gold in Copper On the Hot Seat: Verizon's Mike Ritter on building a foundation for broadband needs with 300 Mbps Related articles:
Verizon posts higher wireline revenues thanks to FiOS
Earnings preview: Verizon seen doing well; ALU to miss guidance
WSJ: FCC likely to approve Verizon's $3.9B spectrum deal, with conditions
Justice puts kibosh—for now—on Verizon-cable spectrum deal Read more about: Copper
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TelePacific on Thursday during the Channel Partners Show announced that it is now offering its SmartVoice PRI, SIP and business-line services to businesses throughout the United States. What enabled the CLEC to expand the service was its move to offer physical two-way nationwide telephone numbers. Although TelePacific has mainly served businesses in California and Nevada, it's clear it wants to appeal to the multisite customer that wants one service provider for all of its services. "Customers with satellite offices and employees outside of our footprint now have the ability to consolidate all of their telecommunications services with TelePacific and be billed for them on a single invoice," said Ken Bisnoff, senior vice president of strategic opportunities for TelePacific. "As long as the customer has an anchor location in California or Nevada, this rollout effectively gives our agents the ability to sell TelePacific as a one-stop shop nationwide." Complementing the nationwide reach of SmartVoice will be the launch of a cloud-based PBX service in Q4. The obvious selling point of the cloud-based PBX service is that businesses can forgo the traditional route of maintaining and deploying premise-based PBXs with one that's completely hosted by TelePacific. Delivered over its own network, the new cloud PBX service will offer a host of traditional features such as control key, dial by extension, eFax, voice mail-to-email translation and call forwarding to up to five other devices. Perhaps the more compelling feature of the PBX service is that it will appeal to the mobile worker with a find me, follow me type service that enables workers to get calls anywhere as if they were at their office. Being a smaller CLEC that's been growing through M&A and organic initiatives, the ability to target the multisite customer with a set of telephony products is something it can use to differentiate itself from a host of cable operators and cloud-based telephony providers like 8x8 (Nasdaq: EGHT) that offer similar product sets. For more:
- Channel Partners has this article Special report: The most important M&As of 2011 Related articles:
TelePacific establishes new channel partnership with Outreach Technology
TelePacific acquires Tel West, Telekenex and OCiX
TelePacific ramps up workforce to keep up with growing customer demand
TelePacific wraps up Tel West acquisition, gains instant presence in Texas Read more about: Clec
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West Virginia's Broadband Deployment Council on Thursday said that while it has $4 million in funds to distribute to telecom service providers and other nonprofit groups to use, it has not been able to attract any interest. Anyone interested in using the money has until the close of business Friday to apply for grants to extend broadband services into the rural segments of the state. As of the end of Wednesday, the council said it had not received one application. "We have no applications officially submitted," said Jan Fox, a broadband council member, in a Charleston Gazette article. "Nobody's going to go early." The council did say that 11 organizations began filling out applications and 36 groups registered at the council's website, www.broadbandgrants.wv.gov. When the deadline expires on Friday, the council said that while it would reveal applicant names and proposed projects on the West Virginia secretary of state's website, it would not say how much money each applicant was requesting. West Virginia has been traditionally dominated by two main broadband service providers--Frontier Communications (Nasdaq: FTR) and Lumos Networks (Nasdaq: LMOS). Frontier, which became the largest telco in the state when it purchased Verizon's (NYSE: VZ) rural lines in 2010, has, not surprisingly, made West Virginia one of its key broadband expansion targets. Earlier this week, the service provider announced that it would start delivering up to 25 Mbps DSL services to 405,000 West Virginia residential and business customers. Meanwhile, Lumos Networks, which was created when nTelos separated its wireless and wireline divisions into two separate companies, has been continually upgrading its metro and long-haul fiber network in West Virginia and surrounding states via its own organic initiatives and the acquisition of FiberNet in 2010. These initiatives have allowed Lumos to serve its rural customers with up to 6 Mbps copper-based DSL and 10-20 Mbps FTTH-based tiers. For more:
- The Charleston Gazette has this article
Related articles:
Frontier to serve up higher broadband speeds in West Va.
nTelos breaks up wireless and wireline holdings into separate units
NTELOS buys FiberNet from One Communications Read more about: Broadband, Frontier Communications
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Telecom Italia (NYSE: TI) and competitive broadband provider FastWeb, which is owned by Switzerland's incumbent telco Swisscom, on Friday announced they are going to jointly build out a fiber network in Italy. FastWeb's parent Swisscom said it would invest €400 million ($516.8 million) to build out a Fiber to the Cabinet (FTTC) network. The hybrid fiber/copper FTTC infrastructure will complement Telecom Italia's existing Fiber to the Home (FTTH) network, which currently passes almost two million homes in Italy's urban areas and has been a major service driver for Telecom Italia and FastWeb alike. To connect to each home and business, the service providers will leverage a copper-based VDSL2 connection that will be able, depending on the condition of the copper plant, to deliver 30 Mbps, 60-80 Mbps, and even 100 Mbps. Although the two service providers will share construction and network costs, they said in a joint statement they will "retain total freedom and autonomy in the development of their own network platforms, technology decisions and commercial offerings." Last February, Telecom Italia got permission from the country's regulator AgCom to commercially launch its long-awaited 100 Mbps Fiber to the Home (FTTH) offering. FastWeb, meanwhile, began offering a 100 Mbps FTTH service for residential customers and small enterprises in the cities of Milan, Rome, Genoa, Turin, Bologna, Naples and Bari. For more:
- see the Telecom Italia and FastWeb release
- Total Telecom via Dow Jones Newswires has this article Related articles:
Telecom Italia gets conditional regulatory approval for its 100 Mbps FTTH service
Italy: FTTH reaches 348,000 subscriber mark
Italian providers create new company to build out nationwide FTTH network
Italian service providers iron out open access fiber network agreement
FastWeb, Wind and Vodafone Italy abandon open access fiber alliance
Swisscom acquires remaining stake in FastWeb for $326 million Read more about: Telecom Italia
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Level 3 Communications (NYSE: LVLT) on Thursday said it is expanding its Vyvx broadcast solutions into the Latin American market, targeting new broadcast and media customer opportunities. The service provider said that it has signed agreements to transmit more than 35,000 hours of video over its network in Latin America. The Vyvx service, delivered over Level 3's IP fiber network, will provide in-region video content to broadcasters and media companies in Latin America and other regions. Thus far, the service provider has made inroads with a number of major Latin America-based broadcast companies, including ESPN Brazil, Terra (a global digital media company and content producer) and TV Azteca, one of the largest producers of Spanish-language television programming. This expansion is timed well. One market where Level 3 could make an impact, said Elia San Miguel, principal research analyst at Gartner, is Brazil. "Brazil, in particular, is making major infrastructure investments to prepare for the FIFA World Cup in 2014 and Olympics in 2016," San Miguel said. For more:
- see the news release Special report: Wireline in the second quarter of 2012 Related articles:
Level 3 reports $1.59B in Q2 revenues, but slow UK government sales drive losses
Level 3's forecast reaffirmation buoys shares 9%
Submarine cable operators protest FCC's USF contribution proposal
Level 3 takes on Latin America's data center market
Level 3, Verizon focus on serving France-based MNCs Read more about: Latin America, CDN
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Week in research: Service delivery platforms on the rise; begun, the PON price wars have
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