Panning for MDU gold

Major telcos are targeting apartment dwellers for video services, spurred on by an FCC ruling and a new kind of fiber

Verizon's dramatic push into New York City is shining a brighter light on what already was a trend in motion: taking advanced service packages into multidwelling units.

Until recently, MDUs represented a major challenge for large telecom companies rolling out triple- and quadruple-play services. For one thing, many of the buildings were locked into exclusive video service contracts with cable companies or private cable operators.

Apartment buildings also represented both an outside and inside plant challenge, and each building or complex tended to be different.

But an FCC ruling earlier this year struck down the exclusive cable deals, paving the way for AT&T, Verizon and others to more aggressively pursue MDUs, and new fiber cabling technology also is making it easier to deploy higher-speed services to individual apartments.

In addition, as these companies get more experience deploying and installing video services, they are gaining confidence and marketing expertise, which is helping them boost the appeal of their services to the MDU audience.

“MDUs do represent a real opportunity for telcos,” said Vince Vittore, program manager for Yankee Group and a broadband specialist. “They haven't traditionally served this market all that well. The key now is for them to focus on broadband services. They need to target the right buildings — the ones where they are likely to have the most impact — and offer the right set of services.”

In many cases, Vittore said, the right service package for apartment dwellers will be different from what homeowners want. “It will be more focused on broadband and wireless offerings than wireline,” he said.

Already AT&T and Verizon are offering such packages, and Qwest is considering a similar plan.

Next page: THE CHALLENGE