Summary

The article’s description of a Texas-style showdown for fiber deployment will probably not accelerate in competition as Verizon resorts to DSL price guarantees and satellite TV bundles.

Analysis

The report of Verizon expanding its FiOS network into AT&T’s northern Texas territory appears to be a fiber showdown, while possibly being doomed to a no-show in other markets.  Verizon’s first promotions of the 2009 New Year are all about retention, and reverting to the basics of offering DSL and reselling satellite TV.  Verizon announced a Price Guarantee promotion for DSL as long as you keep the service with the requirement of an initial two-year contract.  The DSL with 1 Mbps download is only $17.99 per month, but how long will consumers be satisfied with that slow speed?  And Verizon is offering a double and triple-play with DIRECTV.  The showdown, as AT&T re-launches satellite bundles with DIRECTV, could still be against Comcast and Time Warner Cable with attractive satellite prices and contract options.  And in mobile services, the contest could be AT&T’s Yahoo! oneSearch and Verizon’s new Microsoft search deal.  The presentation at CES 2009 will provide the detail to analyze if the $550-$650 million in guaranteed payments is realistic for the volume of mobile searches and ad revenue.  In these economic conditions, Verizon will need the wireless service margins to justify the CAPEX for FiOS in new markets.        

Gregg Kail, MBA consults with leading institutions through GLG

Gregg Kail, MBA, Reseller Manager
Gregg Kail

What is a GLG Leader?|GLG Leaders are a separate tier of Council Members with a Council Rank in the top 5%. These GLG Member Program participants are eligible for ongoing, in-depth consultative relationships with GLG clients.

FormerReseller Manager, AT&T CORP.

 
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.