Verizon Puts FiOS Costs at $22.9 Billion

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Verizon Estimates Its Fiber-Optic Initiative Will Cost It $22.9 Billion

NEW YORK (AP) -- Verizon Communications Inc. put a price tag on its ambitious fiber-optic initiative for the first time, estimating Wednesday it will spend $22.9 billion to rewire more than half of its copper telephone network so it can sell cable TV and superfast Internet connections.

The estimate for the "FiOS" project appeared to be at the lower end of analyst projections. Verizon expects to offset the cost with $4.9 billion in savings from now until 2010 due to the reduced maintenance needed with a fiber network.

Verizon also issued more bullish subscriber forecasts, predicting the project will generate positive operating income beginning in 2009.

Despite the improved outlook, Verizon's share price fell $1.18, or 3.1 percent, to close at $36.78 on the New York Stock Exchange after setting a 52-week high on Tuesday ahead of the update on FiOS. The stock is up 22 percent this year after sliding in 2005 amid worries that the hefty investment in FiOS might not pay off.

With traditional cable TV companies now providing phone service to millions of their video subscribers, there's little disagreement that phone companies need to fight back by overhauling their networks to deliver multimedia capabilities.

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