Verizon, the major US telco, is offering its top tier 50Mbit/s downstream (20Mbit/s upstream) fibre-to-the-home (FTTH) product to all 10m homes and businesses in the 17 states passed by its FiOS network from this week. The top speed had previously been available to FiOS customers in 6 states only. The price of the 50Mbit/s internet access with landline is $89.95/month in New York and Virginia and a higher price of $139.95/month in all other areas.
Our take...The launch of the 50Mbit/s throughout Verizon's footprint gives the telco a competitive edge in luring customers to its FiOS platform from other providers and reducing churn rate. In many markets Verizon operates in a competitive duopoly with cablecos and increasingly in a climate where high speed is being fore grounded by the two forms of operator as a major selling point. Although the high price point of the telco's top tier product is unlikely to attract any subscribers other than those demanding the most bandwidth-heavy usage, the universal rollout of 50Mbit/s will help Verizon to strengthen consumers' perception of the FiOS brand as a leading contender for high speed provision that may in turn persuade some users to defect from rivals and sign up to slower 10Mbit/s or 20Mbit/s standalone packages or lucrative FiOS TV bundles.
To date, only 2 Regional Bells (AT&T in addition to Verizon) and cableco Comcast (albeit in trial form) have commercially deployed next-generation broadband access networks (NGN):
- AT&T's VDSL-based U-Verse network offers end users speeds of up to 10Mbit/s - still only comparable to current first-generation Docsis 1.0 offerings from Comcast (12Mbit/s) and Time Warner Cable (8Mbit/s).
- Meanwhile, Comcast's trial of Docsis 3.0 in Minneapolis and St Paul offers customers 50Mbit/s – in line with FiOS' top advertised product; rival cableco Time Warner Cable has also hinted that it expects to trial Docsis 3.0 in New York City this year.
- In terms of theoretical speeds, Verizon has also been trialling FTTH to give users 100Mbit/s downstream speed. By comparison, VDSL's maximum headline speed is 50Mbit/s, whereas Docsis 3.0 marketed downstream speeds could hit 160Mbit/s.
While the roll out of faster end user connection speeds often accompanies NGN rollout, providers also look to invest in upgrading their infrastructure as a way of driving down operating costs and improving service reliability and control.
The number of connections to the FiOS and U-Verse networks however remains relatively low - according to Screen Digest data, of the total number of broadband connections in the US at the end March 2008 under 3 per cent were on the two incumbents' upgraded networks.
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