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FiOS TV May Hurt DBS More Than Cable

Verizon’s FiOS TV service initially appeared to steal disproportionately more customers from direct-broadcast satellite services than cable, according to an analysis of the telco’s rollout in 34 Massachusetts communities last year by research firm One Touch Intelligence.

In 2006, FiOS TV signed up 11,982 subscribers in the 34 towns, which cover a combined 285,000 homes passed. The service was available in each market for an average of about 90 days, One Touch Intelligence said.

During the time FiOS TV was available, incumbent cable provider Comcast lost 5,216 subscribers across a base of 204,160, a drop of 2.6%, One Touch Intelligence found. Cable overbuilder RCN, which offers service in nine of the 34 communities, lost 1,813 subscribers, or 7% off its base of 25,895 subscribers.

Assuming 3% of Verizon subscribers did not have any prior multichannel video service, that means around 4,600 FiOS TV customers -- 38% of the total for the area--came from DirecTV or EchoStar Communications' Dish Network, according to One Touch Intelligence.

The firm analyzed subscriber statistics for Verizon, Comcast and RCN as of Dec. 31, 2006, provided by the Massachusetts Department of Telecommunications and Cable.

One Touch Intelligence also found that in four towns where FiOS TV had been available longer than six months--Lynnfield, North Reading, Reading and Winchester -- Comcast’s penetration fell between 7.8% and 13.6%. In two other markets where FiOS had been available for longer than six months and where RCN also offered service, RCN took the bigger hit from Verizon than Comcast did, the research firm found.

One Touch Intelligence said Verizon will likely continue to see double-digit penetration gains in markets where it launches FiOS TV service. However, it cautioned that changes in product offerings and marketing will affect individual market dynamics.