will launch TV over fiber by late next year, the regional telecom
said today.
Trials are under way and network construction is slated to begin early next
year. SBC's goal is to make the network available to 18 million households
by the end of 2007.
The fiber network will give SBC enough bandwidth to offer for a
"triple-play" bundle of TV, phone and high-speed Internet services. The
strategy is also being aggressively pursued by Verizon (Quote).
"[Fiber] provides a number of important advantages -- including superior
speed to market with exciting, market-changing services -- and it allows us
to leap-frog today's U.S. telephone and cable TV networks," Lea Ann
Champion, an SBC executive vice president, said in a statement.
SBC also provided details on the cost of the initiative, pegging three-year
deployment costs at $4 billion -- the low end of its previous range. Another
$1 billion is earmarked to activate customers in 2006 and 2007.
Overall, however, SBC expects capital expenditures to increase only slightly
because money is being shifted from its current network.
In existing neighborhoods, SBC will use fiber-to-the-node (FTTN)
architecture, which takes fiber to within 3,000 feet of homes and uses
compression technologies and IP switching to deliver TV, Internet and voice
services.
Fiber-to-the-premises (FTTP) will be used in new housing developments and
some multi-dwelling units. FTTP extends fiber-optic connections from
central offices and remote terminals to customer locations.
SBC said FTTN can be completed in one-fourth the time required for an FTTP
overbuild and with about one-fifth the capital investment.
So far, Comcast (Quote), a prime target of the fiber strategy,
has downplayed the threat.
In the company's most recent conference call, CEO Brian Roberts said even if
Verizon and SBC hit ambitious deployment goals, Comcast will still be the fourth
or fifth competitor in a market, which also includes satellite TV providers.
"Let's play it out," Roberts said at the time, noting that any subscriber
defections to FTTP would likely be spread among Comcast and other players.
Despite the cool assessment, Roberts isn't dismissive of fiber,
acknowledging that it would represent a "meaningful competitor." But from a
business standpoint, he doesn't see it delivering a strong
return on investment.
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