Fiber broadband – it’s duh marketing!

It’s more for Verizon. In the best case scenario, the company is targeting 30% penetration for FiOS connections. Now spread the $20 billion price tag over say 6 million paying customers and the capex per connected customer jumps to $3,500-3,800. So Verizon is looking at a 3-4 year payback, at best, maybe longer.

BT is different. Unlike AT&T and Verizon, who succeeded in getting the FCC to rescind the line sharing rules, BT must still offer its competitors access to its network through local loop unbundling (LLU). So, BT could achieve higher utilization rates, and a faster ROI on its fiber network through a combination of retail and wholesale customers. AT&T and Verizon will have only their own retail services revenues to cover the costs of their investments.

Memo to I. Seidenberg and R. Stephenson: Raise your FTTx penetration targets!

Think about it! The total project costs are already sunk. You have to cover the key neighborhoods just to be in the game. Why stop at 30% or even 50%? Sure the cable guys and the satellite guys won’t let you into the video game without fighting back. But, let’s say you can keep the customer acquisition costs in the $300-400 range, similar to wireless. Leverage your inherent strengths and capabilities to really create a novel experience for the customer.

It’s not about the fiber, or high-speed pipes, or even price.

It’s all about positioning and value, it’s all in the marketing. Duh!

John M. Celentano, is President, Skyline Marketing Group, a Baltimore, MD-based telecom marketing consulting firm. He can be reached at john@skylinemarketing.com.