FiOS vs. U-verse: Architectural, Marketing and Technical Considerations

Information Gatekeepers Inc
July 15, 2010
SKU: IOAA2755635
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Table of Contents Related Reports
FiOS vs. U-verse: Architectural, Marketing and Technical Considerations

 
The Verizon FiOS/AT&T U-verse story has been an engineering and capital expenditure story for several years; now it is a marketing story. Verizon has what is arguably a superior product, at least in terms of bandwidth delivery, and Verizon has achieved a 3:2 dominance in the market over AT&T. However, in the last three quarters, AT&T has been outselling FiOS by substantial (35%-40%) margins. Why is this happening? This report will look in to some of the marketing differences to seek the answers. It will also explore the many other differences between theses two services.

On May 29, 2003, the then three largest RBOCs (BellSouth, AT&T, and Verizon) announced that they had adopted a common set of technical specifications for the delivery of fiber-to-the-premises (FTTP). In other times, the announcement of the FTTP RFP (and the subsequent RFP for GPONs) would likely have been viewed by most with a big yawn — just another technical standardization. However, in those times, (this was in 2003-05,) this was — and it continues to be today — the biggest news in the telecommunications world, perhaps the biggest in years.

In 2010, this story continues to be the biggest thing in telecommunications. Verizon and AT&T have become, in five short years, major video providers via FiOS and U-verse. They are now both ranked in the top 10 for U.S. video providers. Most of the other companies on that list have been in the video business for decades. We expect that by the end of 2010, Verizon and AT&T will respectively serve 3.5 million and 3.0 million video customers. Also, they both rank consistently at the top of customer satisfaction polls covering video customers.

These two RBOCs serve approximately 80 million of the approximately 150 million access lines (53%) in the U.S., which is the main reason for the excitement. They also control the largest interexchange carriers and the largest cellular phone companies. In short, these two companies are the powerhouses of the telecom world. In a recent year, their capital expenditures were 76% of the total by major telephone companies, and constituted over 46% of all capital spent that year by all telecommunications carriers! Clearly, these companies have the financial power to rule the equipment markets. In addition to providing a head-to-head comparison between FiOS and U-verse, this report will focus on providing a complete background on Advanced Access Architectures (AAAs). It will also consider the progress to date of AAAs (or in some cases the lack thereof), and possible changes in architecture. For the first time, we are going to be considering differences in marketing approaches for the two services, including actual experience in ordering the services.

This report, more than any of our past six reports on the subject, will focus on the following:
  • Direct comparisons (architecture, technology, marketing) between U-verse and FiOS;
  • Differences in marketing approaches;
  • Forecasts for the acceptance of AAAs by customers;
  • Bandwidth requirements and options for obtaining that bandwidth;
  • Costs of alternatives in AAAs;
  • Current regulatory issues impacting AAAs, particularly Net Neutrality;
  • Impact of AAAs on legacy high-speed access systems (e.g., xDSL.)


 

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