Verizon FiOS news

Verizon continues deploying its fiber network upgrade FiOS project. It expects to pass 6m homes by the end of the year and add 3m homes per year through 2010. That will lead to 18m homes passed by 2010, or 50% penetration in its territory. Currently, Verizon has about 500k FiOS internet customers, and expects 725,000 customers by the end of the year. Learning curve, additional experience, improved technology and reducing costs have helped to cut the cost to install FiOS into a home from $1200 in January to a figure expected to be $880 at the end of the year. So the magnitude order of the total deployment FiOS cost should be in the range of $18bn through 2010. To recoup such an investment is of course scrutinized by the financial community, and Verizon provided some additional information. First Verizon expects to save $1bn by 2010 as a result of efficiencies gained from the fiber network. Secondly, it expects to be EBITDA-positive by 2008 and would generate positive operating income in 2009. Verizon' strategy is considered as risky, but necessary, to better face off against its rivals. "It's a great opportunity for us to really grow profitable revenue," said Virginia Ruesterholz, president of Verizon Telecom. With these news, analysts appeared pleased and the stock did reach a 52-week high of $38 on Tuesday.