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Verizon hits the gas on fiber campaign

Fleet of Hummers hits the streets to tout Fios fiber-to-the-premise network, as Verizon looks to beat out cable for customers. Photos: High in high-speed fiber

Verizon Communications has taken its Fios marketing campaign to the streets, sending out Hummers wrapped in banners with logos for the new fiber-to-the-home service.

The mobile billboard campaign, which has already kicked off, is one of many targeted marketing moves the company is using to drum up interest in Fios. The new fiber network is planned to eventually carry telephony, television and high-speed data services directly into people's homes.

Since last year, Verizon has quietly spent billions of dollars while digging up streets to lay the new fiber network in neighborhoods in half of the states where it provides local phone service. So far, it has done little marketing to promote the Fios network and services. With about 250 communities up and down the East Coast and in Texas now hooked up, Verizon is turning up the marketing heat in those places as it looks to sign up new customers.

high-speed fiber

"Because the service isn't universally available, we've deliberately tried to make the marketing very local, to create excitement in areas where the services are being offered," said Sharon Cohen-Hagar, a spokeswoman for Verizon.

In addition to sending the large vehicles out to towns like Tampa, Fla., and Keller, Tex., Verizon has also put up billboards on highways and sent direct-mail fliers to homes in areas it now serves. It is also setting up temporary storefronts, or "Fios lounges," in certain communities, such as Falls Church, Va., to give customers hands-on demonstrations of the network's capabilities.

"Fios lounges" differ from Verizon's traditional retail stores because they house kiosks connected to the Fios network that people can use to "test drive" services such as interactive games. The company has even set up TVs in viewing areas so that people can watch promos of the new television service that Verizon expects to introduce later this year.

So far, cable companies--Verizon's main competition in this market--say the fiber-to-the-premise service has had little impact on their businesses. On a conference call with investors last week, Tom Rutledge, the chief operating officer of Cablevision Systems, said Verizon had only won a handful of customers so far. But Verizon argues that its Fios marketing campaign has just gotten started.

Still, some analysts say Verizon has a long road ahead of it. "Building awareness of the concept and of the brand name, which isn't that compelling to begin with, will be the biggest challenge for Verizon," said Jim Penhune, an analyst at market researcher Strategy Analytics. "Because they are rolling out the service one town at a time, they must be very specific in the marketing. This was always somewhat of an issue for the cable companies in marketing their own services."

Verizon is offering Fios at several tiers, with discounts for customers who subscribe to other Verizon services. The base plan offers download speeds of up to 5 megabits per second, with an upload speed of 2mbps for $39.95. For $49.95, consumers can get download speeds up to 15mbps, and for $199.95, users can download at 30mbps and upload at 5mbps.

That compares with Verizon's digital subscriber line, or DSL, service, which the company offers at 1.5mbps for $29.95 in most regions. In select locations, it sells 3mbps DSL service for the same price.

But critics wonder if Verizon will be able to provide customers with compelling-enough reasons to upgrade to Fios, given that the network performance at the price points offered are so close to what's already sold by cable operators. What's more, it's doubtful that Verizon will win many customers in the highest-tiered service, since few consumer applications exist that need that much bandwidth.

"Most people wouldn't even know what to do with that much capacity," Alan Bezoza, an analyst at Friedman, Billings, Ramsey Group, said in an interview last week.