FiOS expansion's not going to happen, CFO tells investors

Verizon (NYSE: VZ) CFO Fran Shammo has slammed the door on any individuals or communities still hoping Verizon might resume its rollout of FiOS services beyond its current franchise obligations.

Speaking at the Goldman Sachs Communacopia Conference in New York City, Shammo said FiOS will wind down as soon as its contractual commitments are met.

"At this point we won't build beyond that, because at this point we have to capitalize on what we have invested," Shammo said, according to a report in Stop the Cap!.

Shammo's comments really aren't new, since Verizon has for several years said it won't be pushing FiOS beyond its current limits. The statement just provides another indication that Verizon is serious in its desire to decrease capital investments in its wired networks while shifting money towards Verizon Wireless. That means, as of 2014, FiOS gets a whole lot less than it's been getting since it launched in 2006 as the only direct wireline opposition to many cable operators.

Even with deep pockets, Verizon said it found it hard to keep coming up with about $700 to reach each home--even though that is only half the cost originally estimated when the FTTH project began.

"The fact of the matter is wireline capital--and I won't give the number but it's pretty substantial--is being spent on the wireline side of the house to support wireless growth," Shammo reportedly said. "So the IP backbone, the data transmission, fiber-to-the-cell, that is all on the wireline books but it's all being built for the wireless company."

The transfer of funds will go straight from FiOS fiber to wireless, bypassing existing copper maintenance, the story said. And even the wireless funding won't be exorbitant.

"[O]verall, I continue to say [investments] will be flat to down and I think we will be probably more slightly down than flat and [CEO] Lowell [McAdam] and I are really starting to focus in on where we spend that investment and make sure that that investment returns on a shorter period of time," Shammo said. "So what I like to say is that our ratio of CapEx to revenue will continue to decline."

And the FiOS expansion will disappear as it does.

For more:
Stop the Cap has this story

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