Qwest commits to FTTN as Verizon FiOS expands

OCTOBER 30, 2007 By Stephen Hardy -- A day after Verizon (search for Verizon) provided customer updates for the FiOS FTTP initiative, Qwest (search for Qwest) announced it will spend $300 million to expand its current fiber-to-the-node (FTTN) footprint.

In a conference call today to discuss its third quarter financial statements, Qwest Chairman and CEO Edward A. Mueller said the carrier's board has approved $300 million in capex to install FTTN within its service region. When and where this expansion will take place was not disclosed, although Mueller noted that the company has FTTN passing "multiple homes" currently and that it expects to spend between $70 million and $100 million to increase that footprint this year. Whether the remaining $200 million to $230 million can be considered incremental to next year's capex figures, Mueller said he didn't know because next year's budget hadn't been set yet. Mueller expects that this year's capex number will roughly equal that of 2006.

The FTTN initiative will allow Qwest to pass an additional 1.5 million homes. However, this is still a relatively small part of the carrier's complete footprint. Mueller says the company has no plans to change its current video services approach, which relies on a partnership with DirectTV. Qwest says it now has 634,000 video subscribers through Qwest ChoiceTV and the DirectTV partnership, up from a total of 350,000 subscribers a year ago.

The new infrastructure will enable Qwest to deliver 20 Mbits/sec to subscribers as part of its Qwest Broadband service, the company says. Qwest Broadband subscribers grew by 111,000 in the third quarter, the company said, supported by transition of dialup users, new standalone broadband customers, and existing Qwest customers adding broadband to their existing bundle.

The Qwest announcement followed Verizon's third quarter earnings statements. Verizon said it added a net of 202,000 new FiOS TV customers, bringing the FiOS TV total to 717,000 customers. It also added 229,000 net new FiOS Internet customers to bring the total in that group to 1.3 million.

Verizon's says its FTTP network passed 8.5 million premises by the end of the quarter. FiOS Internet was available for sale to 6.5 million premises in parts of 16 states by the end of the quarter. Service penetration averaged 20.0 percent across all markets. FiOS TV was available to 4.7 million premises by the end of the third quarter, with penetration averaging 15.2 percent across all markets.

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