FiOS Buildout to Take Breather in 2010

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Verizon is pulling back from its plan to add 3 million homes passed per year with FiOS — to just around a million this year — and is going to spend more on marketing to the areas where it already offers FiOS services.

“This year, we’re going to pass about 1 million premises in 2010, give or take 100,000-200,000 on either side,” Verizon CFO John Killian said on the operator’s Q1 earnings call last Thursday.

Part of the the FiOS slowdown “is an intentional strategy this year to focus down on a lot of the inventory we have, a very strong focus around the MDU [multidwelling unit] population within our franchise territory,” Killian added. “We don’t believe we’ve had enough focus there, and it’s a great opportunity and very cost-effective way to drive new subscribers in new retention.”

Right now, FiOS TV serves around 3 million subs, about as many as Cablevision Systems, the No. 5 MSO (see FiOS TV Tops 3 Million, As Its Growth Slows).

As of Dec. 31, 2009, FiOS passed 15.4 million premises. The goal is still to reach 18 million homes, Killian added, which means “we’ll have a little more to do into 2011 and maybe even to 2012. We’re just stretching it out a little bit longer. We felt that was appropriate, given where the economy was, given some of the attention we’ve got around the Frontier spinout.”

The slowdown comes after faster-than-expected builds in prior years — for example, the FiOS network passed 12.7 million homes at the end of 2008 versus a target of 12 million.

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