Why ditch your cable or satellite company for Verizon’s fibre-optic TV service? How about a free TV?
Since last November, Verizon (VZ) has offered a free 19-inch LCD HDTV to people who sign up for two years of ‘FiOS’ digital TV. While that’s a pricey way to attract new customers — $250 wholesale per set, Investor’s Business Daily estimates — it’s probably working. In a note today, Citigroup analyst Michael Rollins says Verizon’s TV giveaway could push its Q4 net subscriber growth total above his estimate of 200,000 subs. With 717,000 FiOS TV subscribers at the end of Q3, that means the telco could have closed 2007 with more than 1 million TV subs — an impressive accomplishment.
And FiOS is about to get another boost. In its February issue, Consumer Reports gave it a perfect rating — no other cable or satellite operators in the U.S came close. That will no doubt assuage some resistance from people who have a hard time thinking of Verizon as their cable company.
Next step: Take FiOS from a mostly suburban offering into some of Verizon’s major metro areas, including New York City. Besides giving urbanites a much-needed alternative to cable monopolies, moving FiOS into cities could help Verizon’s financial metrics, too. The telco’s $700 per home installation cost should fall once it can connect multiple subscribers in the same apartment building.
When will we see FiOS TV here? Perhaps later this year, or next. Verizon FiOS head Virginia Ruesterholz tells IBD that the company is negotiating cable franchise licenses in “several cities,” including New York and Washington, D.C.
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