Seaton+J.+Strategy+Report

Seaton J

TO: Proximity Video Team FROM: Justin Seaton DATE: February 22, 2010 SUBJECT: Verizon FiOS strategy report

Below is my strategy report for Verizon FiOS. FiOS is Verizon's bundled communication service that consists of telephone, internet, and television. Verizon's hope for FiOS is that it will be the new go-to choice over traditional cable. Whether Gen-Y will help FiOS soar above their competitors depends on how rapidly they expand the availability to their service. After viewing the company's strategy and their competitive landscape, I'd say that they have the proper strategy and excellent technology in place in order to achieve the goal of capturing Gen-Y.


 * Profile**

Verizon, an American broadband and telecommunications company, was formed in 1983. It was formed after the forced breakup, which resulted in the creation of seven smaller companies. After twenty years of mergers and acquisitions, Verizon's shares were made a component on the Dow Jones Industrial Average. Currently, Verizon serves over 140 millions customers and has 250,000 employees (wikipedia). In 2005, Verizon launched its FiOS service. FiOS is a bundled communcations service consisting of internet, television, and the internet. This FiOS service would use a fiber optic network to deliver 500 channels, 100 of which will be high-definition channels. Currently, FiOS is only available to an estimated 12 million people in 16 states. Of those 12 million, around 3 million have subscribed to the service (wikipedia).


 * Competitive Landscape**

Verizon's top competitors include Comcast, Time Warner, Cox and Charter, and Cablevision. But among those companies, Verizon's FiOS service has received the most growth recently. Evidence of their recent growth includes the fact that their FiOS subscription service grew by 30% from 2008 to 2009 (Borges, Peter). As availability to their service becomes more available, it's expected to rise even further. Verizon expects their FiOS subscribers will top 18 million by the end of 2010 (Borges, Peter.)


 * Verizon's Strategy**

Right now, Verizon is still expanding their FiOS coverage range. When they first started in late 2005, they were only available to smaller, suburban markets, but now they are undergoing an aggressive expansion effort in order to be a true competitor to cable. Part of their current strategy, which is pretty smart, is to expand to major metropolitan areas and in areas with lots of apartment buildings. Much of Verizon's strategy is based on the appeal factor on all of their neat features, which there are many. One such feature of the FiOS service is its speediness. Verizon's FiOS service, because it is through fiber optic cable instead of copper wires, gives a much speedier response. According to Peter Borges' article on FiOS, "A regular input that takes 400 milliseconds -- almost half a second -- with cable can be completed in just 40 milliseconds on FIOS, making menu navigation far less frustrating" (Borges, Peter).


 * Gen-Y Implications**

FiOS, I think, will be a very appealing service for Gen-Y. The FiOS service includes many things the Gen-Y crowd is already into. For example, FiOS has greater speed, a better high definition picture, and DVDs worth of content on demand. Also, FiOS is already having pretty good success now being limited available, so I'd expect as they expand more and more of Gen-Y will become interested. Another reason I think it will be a success with Gen-Y is that it fits in with the Gen-Y mentality of always having to buy the latest, greatest technology that is out there.


 * References**

Borges, Peter. "Fiber Optics Bring Faster Internet, DVDson Demand" http://www.bloomberg.com/apps/news?pid=20601088&sid=awbuLN9adspw&refer=muse

Verizon FiOS. Retrived February 21, 2010. http://en.wikipedia.org/wiki/Verizon_FiOS