AT&T, Verizon Enhance Fiber Offerings for SMB Customer Base

U.S. operators AT&T and Verizon have recently enhanced their fiber offerings for the small to medium-sized business (SMB) market. AT&T is leveraging its fiber-to-the-building (FTTB) program—part of the operator’s Project VIP initiative, which debuted in 2012—by phasing in its Business Fiber Service to customers that reside in buildings where the operator has previously rolled out fiber. Considering the customer mix typically found in these buildings, AT&T’s offerings will initially  comprise a combination of asymmetrical and symmetrical speeds that range from 25 Mbps to 300 Mbps, with the intent of offering a symmetrical 1 Gbps service before the end of 2014.

For its part, Verizon is allowing its SMB customers to access symmetrical FiOS speed levels via its SpeedMatch program, which the operator launched in July. With this offer, which Verizon had already made available to residential FiOS subscribers, SMBs will be able to access symmetrical speeds at its six main tiers, which now range from 25 Mbps at a monthly cost of US $65.00 to 500 Mbps at monthly cost of US $365.00. For example, SMB customers that had 50/25 asymmetrical speed will now have symmetrical 50 Mbps. Additionally, Verizon’s existing SMB subscribers will not be required to take any action to receive SpeedMatch.

In the U.S. cable and wireline markets, the race between cable companies and fixed line operators to win over customers has become more and more intense, not only with residential customers but also in the business sector. In recent times, as cable operators made their way into the SMB market with voice and data bundles, it appeared that the U S. large fixed line operators were ignoring this development and only focusing on serving the country’s large enterprises. However, while AT&T and Verizon are maintaining their status as the top two providers in the U.S., it is becoming clear that they are experiencing pressure from cable operators to come up with offerings for the SMB market.

As telcos build out fiber, cable operators are no longer the only entities that own their own fiber in the U.S., in which there is a fiber penetration rate of over 39 percent in commercial buildings with 20 or more employees. Additionally, although Verizon and AT&T’s services are not ubiquitous, for the operators there is real value in investing in these services, as cable operators may try to gain some ground in the large-enterprise market, especially with deals such as Comcast’s acquisition of Time Warner Cable occurring. AT&T and Verizon have not indicated why they have made these services available to SMB customers; however, in a market where cable providers have the means to encroach on fixed line and even mobile operators, it is wise for the fixed line providers to use their services to woo cable customers, particularly in places where telco providers have a fiber footprint already laid down. 

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx