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Broadband Access
Verizon FiOS TV set to light up New York City
Verizon gets regulatory green light to deploy throughout NYC
by Doug Allen
It’s official: Verizon has just received the final regulatory
permissions to offer FiOS TV in all five boroughs of New York City
from the New York State Public Service Commission. The move comes on the heels of the city’s Department of Information Technology and Telecommunications decision to accept the Verizon proposal (April 29, 2008) and approval from NYC’s Franchise and Concession Review Committee (May 27, 2008).
The green-lighted territories give Verizon a boost towards its goal of reaching an additional 3.1 million living units within the next five to six years, or 15 percent of its possible target market. But Verizon’s FiOS currently only passes 600,000 units in
these untapped NYC markets; the carrier’s long-term penetration goal
is about 30 percent of the market, which would translate to over one million
FiOS TV subscribers. Verizon plans to serve both residential and
small-to-medium businesses through FiOS TV (see Verizon launches FiOS
TV for small businesses).
Verizon’s FiOS penetration in New York City currently stands at about
20 percent (mostly in Staten Island). That leaves 2.48 million living units
as yet unpassed before FiOS reaches its full deployment potential for
TV and/or Internet access service. Typical ARPU for FiOS TV is $129 a
month.
FiOS TV service is slated to provide up to 65 high-def channels (that
figure now stands at 31 in NYC), with a further goal of 150 channels
by end of the year. In addition to sports, international and linear HD
channels, Verizon is filling up its video-on-demand platform with over
10,000 titles, 1,000 of which will be in high-def, over the same time
frame.
While Verizon brings a number of strong competitive differentiator
advantages to the table, its rivals are already moving to counter the
emerging threat of FiOS TV and its accompanying triple-play bundle.
“...for example, Time Warner Cable already launched its price lock
guarantee and it has 50 high-def channels available in large parts of
NYC; when it completes the transition to an all-digital network later
this year, the company will have the ability to deliver more than 100
high-def channels throughout the city,” writes Larry Hettick, senior
analyst at Current Analysis, in a recent intelligence report. “In
April 2008, TWC had completed the digital transition in Brooklyn and
Queens and announced that it expected to complete the transition in
Manhattan by the end of 2008. TWC has also introduced its ‘called ID
on TV’ feature in NYC and it plans to launch the Start over video
feature in New York City later this year. TWC already increased its
marketing efforts in Q1 2008, and it has announced plans to be more
aggressive in the city.
“Cablevision has already been competing against the FiOS triple play
in Long Island for nearly two years and with Verizon’s broadband and
voice products for four years and it is now the majority wireline
voice provider on Long Island with more residential phone customers
than Verizon. Cablevision attributed its healthy sales results against
Verizon to its well-positioned triple play; at the end of Q1 2008, 62%
of Cablevision’s new video sales were triple play product sales.
Cablevision estimated that, at the end of Q1 2008, Verizon was capable
of serving a little less than 1.3 million of the 4. 6 million
Cablevision-passed homes and it reported that the market penetration
impact of telco-provided video sales is still in the single digits.”
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