This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Verizon Fans in the Dark on Fiber to Home

Verizon (VZ) wants to ring a new bell.

With its directory business on the block , and the on-again-off-again sale of rural phone lines expected to return to the table after the MCI (MCIP) merger, Verizon is moving ahead with its bold reinvention plans.

But the promise of shedding cash-generating, low-growth businesses to fund an ambitious fiber-optic expansion isn't exactly putting investors at ease.

Verizon shares fell 23 cents to $31.64 in midday trading, reversing earlier gains Monday on word that the company was exploring a directory carve-out. For the year, Verizon is down 22% as Wall Street worries about the cost of realizing the telco's triple play ambitions.

The so-called Fios, or fiber-optic cable to the home effort, is designed to deliver advanced services like high-definition video, Net calling and ultrafast Internet access.

The company says it will string fiber past 3 million homes this year and 6 million next year, covering roughly a fifth of its territory.

But Verizon hasn't offered many soothing words about the estimated $20 billion price tag attached to the fiber project. In fact, investors have been left almost entirely in the dark about the company's progress.

A Verizon representative says the company will not discuss its progress in terms of subscriber numbers. "It's a competitive business and we are competing head-to-head with others like cable companies," says the Verizon rep.

The Fios service is available in some parts of several dozen communities, and the TV service is up and running in Keller, Texas, and Herndon, Va.

The company says it has about 12.4% penetration in markets where it has marketed the service for more than six months. Some analysts say that means about 100,000 Fios subscribers as of the end of September.

Based on estimates and analysts' cost projections, Verizon will have spent $3.2 billion on Fios work over the past two years. And assuming the company has 150,000 subscribers by year-end, that would mean Verizon paid about $21,000 for each new customer.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs