Friday, September 29, 2006
By the end of this year, Verizon expects that video service that is now available to 1M homes will be closer to 1.8 million, and by 2010, to 15M homes. "By the end of this year, the company expects the cost of passing each home to drop to $850 from $1400 in 2004....However, the company’s net capital expenditure for each home passed is $1434, and for each home connected, it’s $2535.... To get an 11% return on its investment (for the last half of this decade), Verizon calculates it would need to collect $39 a month in incremental cash per FTTP subscriber." Verizon’s model of feet-on-the-street marketing supposedly has customer acquisition costs comparable to that of its peers in the satellite and cable sectors. "I don't think that those (services) are going to steer people to make a decision to take one service or another," said Bob Elek, spokesman for Verizon. "Ultimately, the price is the most important thing."