Verizon Could Be Next Telecom Firm to Launch Satellite TV Services

Jul. 22–Verizon could be following its telecom peers SBC and Qwest in a race to start hawking TV to their phone customers.

In a bid to take on their aggressive cable rivals, both SBC and Qwest announced two separate deals yesterday that will let them offer satellite TV services along with their phone, wireless, and Internet offerings.

And coming down the line will likely be Verizon, analysts said yesterday. But the phone giant won’t necessarily partner with a satellite service.

Instead, it could use its soon-to-be upgraded fiber optic lines to launch its own video services. That would put Verizon on the same playing field as the cable giants.

“They’re looking at a number of options to offer video content. Once they install fiber to the premises, they could offer video services along with anything else,” said telecom analyst Kevin Calabrese of Argus Research.

“We’re quite sure it’s going to happen in the future,” Calabrese added. “It’s just a matter of how they finally do it.”

A Verizon spokesman downplayed any near-term push into TV.

“We believe our bundle of services is sufficient to provide what customers need and want,” said Verizon’s Jim Smith.

But Smith added that “if we so desired we could put onto the fiber optic link, entertainment at least equal to what one could get over cable.”

Thomas Weisel, telecom analyst Ned Zachar cautioned, “it will be a long, long time before Verizon provides video services that would be considered a substitute for cable.”

The phone giant would first have to assess the cost of such a massive project and measure consumer demand.

But yesterday’s moves by SBC and Qwest, could spur Verizon along.

SBC agreed to invest $500 million in EchoStar, and in exchange will now be able to offer EchoStar’s Dish satellite network to its customers. SBC previously failed in a bid to snap up satellite giant DirecTV, which was snared by Rupert Murdoch.

And Qwest did much the same yesterday, striking co-marketing deals that will allow it to offer both DirecTV and the Dish network in several of its markets.

The flurry of phone activity is a sign that the telecom companies are gearing up for a fierce battle with the cable giants.

For now, the cable guys have a big leg up. They are way ahead in offering high-speed Internet access. And now they’re pushing into the telephone business.

To fight back, the telecom companies are trying to gain leverage by bundling more and more services.

“The phone companies are playing catch-up,” Calabrese said.

By striking its deal yesterday, SBC became a one-stop shop for phone, Internet and TV services.

“What SBC is saying is that bundling of services into the home will reduce the likelihood that their customers would migrate to cable,” Zachar said.

“Customers really like integrated billing,” Calabrese said. “SBC can now market telephone and TV to their clients on a single package, with a single bill.”

That’s just what Verizon has recently begun doing with phone, cellular and high-speed Internet services.

—–

To see more of the Daily News, or to subscribe to the newspaper, go to http://www.NYDailyNews.com

(c) 2003, Daily News, New York. Distributed by Knight Ridder/Tribune Business News.

VZ, SBC, Q, DISH, GMH,