By Rich Nesin, General Manager and Resident Philosopher, HomePNA
So much to write about, so little time. I was in the middle of a blog on the positive 4Q results from Netflix and Verizon FIOS last week when I saw the “Recession’s Silver Lining Ringing True?” article from Telecompetitor newsletter -- which said most of what I was going to say and said it pretty well: “But for the telecom sector, there may lay a silver lining. This beacon of light premise suggests that carriers who offer entertainment options may benefit from today’s economic climate. The thinking being that consumers will choose home based entertainment options over going out to save money.”
I would have included AT&T new 264,000 new Uverse TV customers bringing their total to over 1M (although they did push the goal to pass 30M homes a year to 2011).
One difference between AT&T and Verizon is the penetration. Verizon claims 21% while AT&T’s 1M customers out of 17M homes passed works out to about 6% penetration. So what? AT&T uses VDSL to deliver Uverse over phone wires. When they say they “pass” 17M homes, they mean that they have installed the necessary VDSL equipment near 17M homes. Add a new VDSL line card to one of those equipment cabinets and you connect about a dozen or so new Uverse TV customers. Lot’s of upside there. Verizon’s approach requires them to run a new fiber cable to every new FIOS customer’s house. Either way, TV service is helping these telcos compensate for declining landline businesses while helping to add and retain broadband customers.