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Verizon Plans Fiber-Optic Trial Run

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Verizon Communications Inc. (VZ) is planning to build a pilot program to test new ways to deploy fiber-optic cables in New York City. According to reports, the company is planning to use techniques like micro trenching and saw cutting to insert cable through sidewalk. These techniques are expected to consume smaller space for cable insertion and ultimately result in reduced cost compared to the traditional methods of deploying cables.

Currently, Verizon is initiating a pilot project in collaboration with New York City authorities.  If the deployment is done successfully, the company will carry out such network deployments in the whole of New York, covering five boroughs by next year.

The company’s main aim is to expedite the deployment of fiber optic service, replacing traditional copper lines so as to increase data speed and curb network traffic. Currently, Verizon provides fiber optic networking only for its FiOS TV and broadband services.  Through copper-to-fiber migration, the company intends to drive FiOS revenue growth and maximize profitability.

Apart from improving network deployments, Verizon is taking several other steps to improve its wireline service – FiOS – that competes with AT&T, Inc.’s (T) U-Verse services and Time Warner Cable (TWC). The company introduced new FiOS pricing plans (set-top boxes and planned bundled changes) that would accelerate consumer revenue growth for the next several quarters. Verizon also collaborated with Starz (STRZA) – a top-notch global media and entertainment company – to launch STARZ PLAY and ENCORE PLAY. Overall, we believe these combined efforts would lead to improved revenue, high operating margins and greater share in the cable services market.  

Verizon has a Zacks Rank #3 (Hold).

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