Panning for MDU gold

THE BIG PUSH

Verizon announced its deployment of reduced bend radius fiber earlier this year, but it already had begun making a bigger push into MDUs. In February, the company announced it would extend its FiOS network to the 11,232 apartments on 80 acres in Manhattan occupied by Stuyvesant Town and Peter Cooper Village.

“It's a matter of technology evolution,” said Eric Cevis, vice president of Verizon Enhanced Communities, which handles multidwelling units. “We have been in the game for a period of time, and some of the costs have come down as we have scaled the program. The costs have come down with the volume and with technology improvements. New York has been the most lucrative marketplace in terms of number of units we have under contract. A larger percentage of MDUs sit in that area.”

In most of the 17 states in which Verizon is rolling out FiOS, 25% of households are in MDUs, Cevis said, but in New York state, about 35% of the footprint is MDUs, and New York City accounts for 25% of that — a segment Cevis said Verizon can now more aggressively pursue. (See sidebar at right.)

In addition to reduced bend radius fiber, Verizon now can get smaller ONTs, and it is able to rack-mount the units and to recess them, again to reduce space requirements, Cevis said. As a result, Verizon is pushing harder into MDUs and working more aggressively with landlords.

“We are working with landlords, getting premise access license agreements under which the building owners give Verizon permission to bring our FiOS to that building,” Cevis said. “We negotiate with that same developer/owner on a marketing agreement. The idea is that if they allow us to do more things on property to market the services to your actual tenants, we will get more penetration.”

The third step in marketing Verizon's service is to “go beyond the business-to-business marketing and go business to consumer,” Cevis said. “We get to the individual tenant and convince them to order our voice, data and video services. We will send direct mail to them, do door-to-door sales with them, barbecues, beach parties, at our stores and at the big boxes. In some places, we pull all the tenants together and make them aware of a big opening.”

Verizon also is doing what it calls “events in a box.”

“We host a party in the tenant's apartment, and for every friend that attends and is a sale, we give them a few dollars,” Cevis said. “We also have a leasing-agent reward program, where we will [offer incentives] to drive penetration — they can order from a catalog of gifts — and we put a demo account in the leasing office so tenants can try it.”

As FiOS has become better known, more landlords are not only open to the idea of having their buildings wired, but are eager to have that differentiation, Cevis said.

“We are finding them to be very eager,” he said. “I've been in this program two and half years, and at first there was a lack of awareness and a lot of questions about what we were going to do, the technology and the space requirements for our equipment. Now it's like granite countertops — it's considered a feature. We've picked up apartment guides and noticed they've started to identify which buildings have FiOS.

“Buildings with FiOS are considered tech-enabled, future-proof. If owners flip the building, they can sell for a higher price; some are actually charging higher rents,” Cevis said.

Next page: THE U-VERSE APPROACH