SBC Communications to Detail Plans for New IP-Based Advanced Television, Data and Voice Network
SBC Communications Inc. (NYSE:SBC) today will provide operational and financial details on its plans to deploy fiber optics closer to customers and build an advanced, IP-based (Internet Protocol) network capable of delivering a rich array of integrated next-generation television, data and voice services substantially beyond what is available from today's telephone, cable or satellite TV providers.
In a conference call today, the company will say network lab and field trials are under way, network construction is scheduled to begin in the first quarter of 2005 and SBC's new IP-based network is expected to be available to 18 million households by the end of 2007. The launch of IP-based TV services over the new network is planned for the fourth quarter of 2005.
SBC now expects that three-year deployment costs for Project Lightspeed will be approximately $4 billion, at the low end of its previously announced range of $4 billion to $6 billion. In addition, there will be customer-activation capital expenditures of approximately $1 billion spread over 2006 and 2007. Because a significant portion of capital expenditures for Project Lightspeed will replace and refocus ongoing spending for its current network, SBC expects incremental capital investment for this project to be relatively small.
In 2005, SBC expects that its total capital expenditures will be at the high end of its 2004 guidance range of $5 billion to $5.5 billion.
SBC expects progress from other parts of its core wireline business to more than offset dilution from the deployment.
"Project Lightspeed provides a number of important advantages - including superior speed to market with exciting, market-changing services, and it allows us to leap-frog today's U.S. telephone and cable TV networks," said Lea Ann Champion, SBC IP operations and services senior executive vice president.
"Over the past several months, SBC teams have put intense study and careful analysis into this project," Champion said. "Our deployment schedule is achievable. Our approach is capital-efficient and financially disciplined - capable of delivering positive returns on investment with conservative penetration assumptions. We are very confident in our ability to execute and make solid progress in the months ahead."
Speed to Market, Revenue and Cost-Savings Opportunities
Project Lightspeed will use both FTTP (fiber to the premises) and FTTN (fiber to the node) technologies.
In existing neighborhoods, or "overbuild" situations, SBC plans to use an FTTN architecture, which on average takes fiber to within 3,000 feet of homes being served and makes use of advanced compression technologies along with IP switching to deliver high-quality TV, Internet access and voice services. FTTN is capable of delivering 20 to 25 megabits downstream, sufficient to simultaneously deliver four streams of TV programming, including HDTV and Internet access with robust speeds, and IP voice - all on a common IP network platform.
FTTP architecture will be used in new housing developments, as well as in some multi-dwelling units. FTTP extends fiber optics connections from central offices and remote terminals to customer locations.
While the two architectures support the same services and deliver many of the same capabilities and benefits, the company expects that FTTN deployment can be completed in one-fourth the time required for an FTTP overbuild and with about one-fifth the capital investment.
By the end of 2007, the company expects to reach 17 million households with FTTN technology and nearly 1 million with FTTP.
Both FTTN and FTTP are expected to create significant revenue opportunities through new services, and both also are expected to deliver substantial operating cost savings in installation, maintenance and customer care. FTTN will deliver approximately 70 percent of the network operational expense savings available from FTTP.
Source: press release
Permalink: SBC Communications to Detail Plans for New IP-Based Advanced Television, Data and Voice Network
