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As Cable Encroaches, Verizon Places A Bet

Investor's Business Daily


October 20, 2006

Verizon Communications (VZ) has made a gutsy wager.

The local phone company has bet it can sign up 4 million customers for TV service by the end of 2010. And it's ready to ante up at least $18 billion to prove it.

Why such a big bet? Because Verizon's traditional phone business is slowly dying.

So it's trying to match package deals sold by cable TV firms, which sell home phone service along with speedy Internet access and pay-TV.

If Verizon doesn't match cable's "triple-play" bundle, it may lose many of its best customers over the next five years, analysts say.

"Verizon understands that there needs to be a transition from being a pure voice company into a multi-play company in order to win," said Ford Cavallari, an analyst at Monitor Group.

Verizon is in the early stages of rewiring residential areas with fiber-optic lines. The project will cost more than $18 billion.

The firm expects to have 175,000 TV subscribers by year's end. To reach its goal of 4 million by 2010, Verizon must lure people away from cable or satellite TV services.

With a programming lineup similar to its cable rivals, that may mean competing on price...

( The entire article is at the following source: http://www.topix.net/content/ibd/2016833624272113577000132691653059826473 )
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