Verizon ups wireline ante with 150Mbps broadband

Kamalini Ganguly/ Ovum
05 Jan 2011

It’s an exciting time for Verizon’s wireless broadband plans. Verizon launched LTE services nationwide on December 5 and has reported initial success with its MiFi devices. It is readying itself to sell Apple iPads, and supposedly iPhones, in its retail store early this year, ending AT&T’s exclusivity in the US.

But Verizon is not letting the spotlight on its wireless business steal attention away from FiOS and the wireline business. On November 22, Verizon announced that it was launching a 150Mbps downstream/35Mbps upstream FiOS broadband tier by the end of 2010. With that, Verizon has once again shot past its cable competitors, Cablevision and Comcast, to offer the highest residential broadband speeds in the US.

Coupled with Verizon’s other recent announcements, Ovum believes it is more of a marketing war, aimed at its customers, competitors (both MSOs and AT&T), but also the FCC, than an indication of Verizon stepping up wireline spending in the short term.

In line with previous announcements and as expected, Verizon’s wireline spending, including FiOS, for year-to-date 2010 was $5.1bn, which is down $1.5bn or 23% from last year. In comparison, wireless spending, driven by capacity upgrades and LTE rollouts, was $6.2bn for year to date, an increase of $1.1bn and 21% compared to last year.

Having passed 15.4 million households, Verizon was expected to fulfill its target of passing 18 million households by the end of 2010. But Verizon has now extended that timeline through the year 2012.

As the initial rollout has wound down, GPON OLT port shipments dropped in 2010, compared to the earlier years. In an encouraging sign for Verizon, however, FiOS revenues are growing, with Verizon reporting 29% growth YoY, as customer penetration grows.

During 2009, despite initial denial, Verizon suffered from the economic downturn as the acquisition rate for FiOS customers dipped. However, subscriber growth and ONT/ONU shipments accelerated in 2010 as the number of homes passed and locations where services are available grew.

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