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Verizon Surprises Investors with High FiOS Roll-Out Costs

6:00 am on September 29, 2006 | Category: Business, Corporate, Internet, Telecom Services, Television

Verizon Communications has finally released an in-depth explanation of its fiber optic networking plans this week, revealing that it plans to spend $23 billion on its fiber optic roll-out by 2010, with a goal of turning an annual profit in 2009.

The telecom giant has been installing fiber optic cables throughout its footprint over the past few years, building a network capable of reaching 4.5 million households in 16 states. A total of 500,000 customers actually make use of Verizonâ€™s fiber optic broadband services, and 100,000 subscribe to the companyâ€™s FiOS television offering.

To reach these customers, however, Verizon is spending heavily on network installation, paying an average of $873 to reach each customerâ€™s curb, and an additional $933 to fully connect each home.

The company says it can cut these figures by around 25% over the next four years, but investors are still squeamish about the high costs. Verizon shares dropped by $1.18, or 3.1%, on Wednesday after these numbers were announced.

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