Verizon showcases fiber-optic TV service - East Valley Tribune: Business

Verizon showcases fiber-optic TV service

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Posted: Wednesday, December 27, 2006 3:43 am | Updated: 3:03 pm, Fri Oct 7, 2011.

FAIRFAX, VA. - Verizon Communications has flooded mailboxes, gone door to door and even handed out free ice cream as it seeks to sell its new FiOS television, telephone and high-speed Internet service.

Now, the phone company is following Apple Computer and other high-tech companies that have opened stores in shopping malls to show off their offerings to consumers.

The stores, called Verizon Experience, provide a snazzy setting for people to toy with new gadgets, play computer games, lounge in front of high-definition TV sets and see how they’re all enhanced by FiOS, its multibillion dollar effort to replace the copper wires of its telephone network with high-capacity fiber-optic lines.

“This is a place where you can touch and feel and see it all, and it’s all under one roof,” said Verizon Wireless spokesman John Johnson, who said the company is not abandoning its other marketing and retail strategies.

Verizon Wireless — a joint venture of Verizon and Britain’s Vodafone Group PLC — and other cell phone providers have long used retail outlets in malls and elsewhere to sell phones and service contracts.

But Verizon believes its Experience stores are a new concept, particularly in the cable and satellite TV industry where providers more frequently market their products at Best Buy Co., Circuit City Stores and other electronics retailers.

The Verizon Experience stores perhaps bear the closest resemblance to those owned by Apple, which has opened 147 stores worldwide since 2001 to showcase its computers, software and iPods.

Verizon opened its 5,000-square-feet Fairfax store Dec. 15 inside Fair Oaks Mall with little advertisement or fanfare. On a recent weekday afternoon, the 20 or so staff members outnumbered customers.

The store is considerably busier in the evening — in part due to its prime location next to a new Cheesecake Factory that often draws an overflow crowd.

Verizon has so far opened only one other store — in Southlake, Texas, near Dallas. Both stores are located in Verizon’s most developed FiOS markets.

Still, even in northern Virginia, many of the customers who come in to check out the FiOS service are not yet able to subscribe, as Verizon continues to lay out the miles of fiber-optic cable for the service.

“One of the hardest thing we have to do is disappoint customers who check us out and are excited by what we have to offer, but we just can’t yet provide the service to them,” said Andrew Vardaro, the store manager at Fair Oaks.

Verizon will decide some time in 2007 whether to open additional stores.

FiOS is one of the company’s most ambitious projects ever, as it seeks to become a one-stop shop for its customers’ communications needs with its new fiber lines that run all the way to a customer’s home.

Establishing FiOS infrastructure is incredibly expensive: the company estimates it will spend $23 billion just to rewire its network.

FiOS TV has been launched in parts of seven states: Texas, California, Virginia, Maryland, Florida, Massachusetts and New York. FiOS Internet service is available in parts of 16 states.

The company said it has about 118,000 TV subscribers nationally out of more than 1 million who are able to receive the service.

Alex Horwitz, a spokesman for Cox Communications, which provides cable TV to about 250,000 subscribers in Fairfax County, Va., noted that Cox has its own sales station and marketing presence inside Fair Oaks Mall.

Horwitz said Cox, like other cable operators, offers bundled Internet, phone and TV service for as low as $79 a month. (The price of FiOS services varies by location.)

Dennis Mendyk, managing director of New York-based Heavy Reading, a market research publication dedicated to the telecom industry, said the massive marketing effort is appropriate given the challenge Verizon faces in getting FiOS — particularly FiOS TV — up and running.

“It’s very expensive, but from their point of view this is the next great battle,” Mendyk said. “The cable operators and the telecom operators have identified each other as their main competitors. The spending on convincing consumers to pick one side or the other will be intense for probably the next three to five years.”

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