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Summary:

An interesting bit of look-ahead from ABI Reseach claims that by 2011, 55 percent of fiber-connected homes will get their video services from that link, up from the 4 percent that do so today.  While the number sounds good — 55 percent of anything is good, […]

An interesting bit of look-ahead from ABI Reseach claims that by 2011, 55 percent of fiber-connected homes will get their video services from that link, up from the 4 percent that do so today. 

While the number sounds good — 55 percent of anything is good, right? — the language needs some more parsing. If you are Verizon, building out a massive fiber-to-the-home infrastructure, you better hope the eventual video take rates are a lot higher than 55 percent, or else Wall Street might stop the rollout before many more trenches get dug. Right now, the video uptake for VZN is around 50 percent, good but not great? (or maybe still too early in the game to attach much meaning to numbers?)

Michael Arden, the analyst who penned the report, is quoted as saying: 

Companies are going to considerable expense to deploy fiber-to-the-home; spending a little more to establish a video network helps them to pay off the access network investment. That’s why wherever you see a fiber-to-the-home deployment today, the service providers are talking about offering triple play services.

Haven’t read the full report, but its conclusions (video is necessary for fiber deployments to succeed) offer clear insight as to why Verizon and AT&T are battling so hard to ease the local franchising rules for offering video services; if the state governments or Congress can smooth the path toward video deployments, that’s one less expense item in the battle royale between telcos and cablecos for the last mile to your TV.

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  1. Love this topic. Thanks for covering.

    Video isn’t just about making the fiber investment worthwhile. The telecoms are ultimately going to need video and advanced services to survive.

    “While growth in broadband wireline revenues remains robust in the US, it is not enough to overcome steady losses in consumer wireline voice revenues, reports In-Stat.”
    http://www.instat.com/newmk.asp?ID=1617

    And I love the ongoing debate about whether Wall Street will continue to support the fiber rollout. Fiber is going to happen. The investment either takes place now or later, but it’s going to happen.

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