FTTP Math Doesn’t Add-Up

Yesterday the big news was Verizon’s big plan to expand its fiber-to-the-home experiment to newer markets. The Eastern Bell promised mega-bandwidth for a few dollars. If that is the case, then things should be looking good for their primary FTTP gear supplier, Advanced Fibre Communications, right? Wrong, for after the market close, AFC announced a disastrous quarter.

“Our revenues came in somewhat lighter than we had anticipated,” said John Schofield, chairman, president and chief executive officer at AFC. “This was primarily due to a supply constraint of a key component that impacted FTTP shipments which we expect to be resolved in the current quarter.” This is a case of classic double speak. I will translate it for you: [a] Verizon is not deploying FTTP as quickly as they would like us to believe or [b] that AFC’s gear does not work. Which one is it I don’t know.

Phil Harvey over at Light Reading (why doesn’t he write more often) does some number crunching and comes up with this:

For, even if a full one third of the residents in Keller subscribe to Verizon’s FTTP network, the carrier’s network will have cost it about $1,360 per customer served. Supposing one third of Keller’s population does subscribe to FTTP services at the $45 monthly rate, Verizon would take about two-and-a-half years to make its money back.

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