They're talking 'bout FTTH at ECOC

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Go Buy Corning Stock - Info from Standard & Poor's

S&P says demand for the company's LCD panels and fiber-optic gear will strengthen and rates the stock a strong buy

We contend that Corning (GLW; recent price, $24.71) is well-positioned to benefit from growing demand for both liquid-crystal display panels and fiber-optic telecommunications equipment. By our analysis, Corning's markets for LCD glass panels will remain strong, while the company's investments in facilities and its relationships with leading market share television manufacturers should yield higher sales.

We also forecast that fiber-optic sales to the telecommunications sector will strengthen over the next two years. We expect strong revenue and earnings-per-share gains in 2007 and 2008.

In our view, the shares are undervalued vs. those of peers and warrant a 5-STARS (strong buy) recommendation.

The telecommunications segment produces optical fiber and cable and hardware and equipment products for the worldwide telecommunications industry. A significant portion of Corning's optical fiber is sold to its own subsidiaries. The company's hardware and equipment products include cable assemblies, fiber-optic hardware, fiber-optic connectors, and optical components and couplers.

In April, 2007, Corning announced plans to reopen a portion of its Concord (N.C.) optical fiber manufacturing facility as a result of volume growth in the optical fiber market, which has been greater than 15% over the past two years. In July, 2007, the company announced plans to expand its optical fiber manufacturing facility in China based on continued growth in that country's optical fiber market. The expansion is expected to be completed in 2009.

Fiber Optic Connector, Mechanical Splice Global Market Forecast

The global fiber optic connector and mechanical splice consumption last year (2006) was $1.396 billion. The consumption value will increase with strongly rising quantity growth partially offset by declining average prices. By the year 2011, the worldwide consumption value is forecasted to reach $3.451 billion.

North America led in global consumption with 47.3 percent or $660million in 2006. North American consumption will expand in value to $1.43 billion by 2011, as shown in Table 1.1.1. North American connector consumption will be driven by the proliferation of relatively shorter links used in private data and local loop networks. European fiber optic connector consumption, 21.2 percent in 2006, is led by the European Union member states as they transition to open competition in delivery of broadband services to business, as well as residential customers. The fastest growth in connector consumption will occur in Japan/Pacific Rim with a forecasted average annual growth rate of 25.5 percent (2006-2011). Rest of the World (including South America) region stimulated by favorable national economic policies and the trend toward telecom liberalization also has an impressive forecast of annual growth.

Customers agree: Fiber is good for you - Television companies lead satisfaction survey

Satellite and cable television services might have more formidable competition in telephone companies than they might have imagined, judging from customers' reactions.

A study scheduled for release Tuesday found that FiOS, the fiber-optic TV service from Verizon Communications, scored the highest on a recent customer-satisfaction survey.

Adding those who are very or somewhat satisfied with their current TV provider, FiOS scored 96%. DirecTV is second with 89%, then Dish Network with 82% and Comcast and AT&T U-verse, another fiber-optic service, tie at fourth with 73%. Cablers Cox, Cablevision, Time Warner and Charter, in that order, bring up the rear.

The survey of 1,586 consumers is from ChangeWave Research.

Run by Fox News personality Tobin Smith, ChangeWave draws on an alliance of 10,000 members who are wealthier than the general public and earlier adopters of new technology. ChangeWave surveys its alliance for the purpose of locating investable Wall Street trends.

About 4% of the alliance members are fiber-optic TV subscribers, 27% are satellite subscribers and the rest are cable customers.

"What's perhaps most striking is that none of the top players in terms of customer satisfaction are cable companies," the report indicated.

When grouped by type of service, only 13% of cable customers are "very satisfied" with their TV provider, compared with 32% of satellite customers and a hefty 45% of fiber-optic subscribers.

On the flip side, cable comes out last again, with 6% saying they are "very unsatisfied," compared with 2% for satellite and fiber-optic.

When "very satisfied" and "somewhat satisfied" are lumped together, cable is at 70% and satellite and fiber-optic tie at 85%.

"Satellite subscribers appear far more content with their TV service than cable subscribers," the report found. "Although based on a smaller sample, an impressive 85% of fiber subscribers gave the newest TV technology a thumbs-up."

Naturally, the survey sought to predict the future, a profitable endeavor if ChangeWave can call it correctly. It found that 13% of its alliance are considering a change, and 44% of those plan to switch to fiber-optic.

ChangeWave director of research Paul Carton calls that "a huge eight-point jump since the previous survey."

The survey found 40% of those planning to change their service provider will switch to satellite and only 15% will switch to cable, with the majority considering Comcast and Time Warner/Road Runner.

The findings, however, are contingent on the ability of the fiber-optic providers to expand their coverage fast enough to keep up with the demand, which is no small feat.

U-verse, which got a later start than FiOS, only has about 100,000 subscribers nationwide, mostly because its infrastructure is not built out much. But AT&T has said that it will spend $6.8 billion to build its network so that it will pass 18 million homes by the end of 2008. FiOS, which passed the 1 million subscriber mark in June, already topped 5 million homes and will pass 8 million by year's end.

From 2007-11, TV provided by phone companies in the U.S. will grow their subscriber ranks by 52.5% annually to 14 million. Cable will grow at less than 1% to 67.7 million and satellite will grow at 1.7% to 30.5 million.

"These findings are quite bullish for fiber-optic TV," Carton said of the ChangeWave survey. "Not all TV services are equal."

Verizon Shoots FiOS Infomercials

Telco Targets Comcast Markets With ‘My Home 2.0’

Verizon plans to hype its FiOS product this fall through infomercials modeled after reality shows such as ABC’s Extreme Makeover.

The telco said Wednesday that it will pick five Pennsylvania homes this month to wire with FiOS TV and FiOS Internet. The infomercial series, called, My Home 2.0, will bring “the world of high tech into the homes of regular families,” Verizon said. “Segments will feature an energetic trio of technology gurus dispatched to analyze each family’s particular situation, solve problems and set about transforming their lives through technology.”

Verizon said it will pick homes in the Philadelphia area, where Comcast is the incumbent operator.

It plans to begin filming Sept. 12 in the Bucks County community of Yardley, and will wrap up with a communitywide block party on Sept. 15 as the family’s home-technology makeover is unveiled.

Verizon said it will pick two other southeastern Pennsylvania homes for My Home 2.0, and that later this fall, it will select two Pittsburgh area homes for “technology makeovers” that will be used for the series.

The telco didn’t say which networks will carry the infomercials.

U-verse growing rapidly

San Antonio-based telecommunications giant AT&T Inc. said it now has 100,000 subscribers to U-verse, the pay-TV service it rolled out to compete with cable rivals.

The company also said the copper and fiber-optic network over which it delivers video programming now passes 5 million households, 3 million shy of the 8 million it's projected to reach by the end of this year.

The new subscriber landmark comes about half a year after AT&T delayed its U-verse expansion to fix technical glitches that dogged early customers. The company ended last year with just 3,000 customers, most of them in its San Antonio launch market, leading some analysts to question whether it effectively could use the platform to reach customers nationwide.

"Since the end of last year, we've added 97,000 new customers, and we think that shows good progress," company spokesman Wes Warnock said. "We're very happy with where we are at this point."

This month, AT&T will begin expanding U-verse's interactive features to include games and the ability for customers to check stocks, weather and Yellow Pages listings via their TV remote, Warnock added. Dallas will be the first market where such features become available, and others will follow in coming weeks.

The company also plans to launch at least five additional high-definition channels in coming weeks, Warnock said.

"We think those interactive features are what help differentiate between us and cable," he said. "And this is just the beginning."

AT&T is eager to get into the video business as cable providers such as Time Warner Cable and Comcast Corp. have moved aggressively into the residential and business phone market. Both phone and cable companies are eager to lure customers with a so-called "triple play" of telecom services that includes phone, video and high-speed Internet service.

Rival phone company Verizon Communications Inc. is installing new fiber directly to customers' houses to deliver its video service called FiOS.

While standard phone service has become less profitable for telecom providers, Frost analyst Le Keough said consumers are spending more on other services such as broadband access and video. That increases the urgency for phone companies like AT&T to expand into video.

"Households spending on those services is increasing faster than the rate of inflation," Keough said. "If you can exploit that, it's a good market to be in."

U-verse's rollout delays and technical glitches last year touched off speculation that AT&T would seek another way to enter the video business — buying a satellite TV provider, for example. But analysts said the company's brisk and continued expansion has hushed much of that talk.

"The U-verse deployment sounds like it's actually starting in earnest," Keough said. "If they managed to fix their technical issues, the rest of the rollout should be successful."

Warnock said AT&T remains committed to U-verse and has worked through its technical issues. It has expanded the service market by market this year, reaching 30 metro areas, including Los Angeles, Houston and Milwaukee.

In May, AT&T said it will spend up to $1.4 billion more than planned to continue expanding U-verse. That boosts its projected cost to $6.5 billion by the end of 2008 from previous estimates of a little more than $5 billion.

What's more, in December the company will announce plans to expand U-verse into the Southern states served by phone company BellSouth Corp., which it bought this past year. That announcement, Warnock said, will expand its rollout beyond earlier projections that its network would pass 18 million homes by the end of 2008.

Sterlite launches optical fiber for tight radii

SEPTEMBER 4, 2007 — Sterlite Technologies Ltd. will launch BEND-LITE (E) single-mode optical fiber at ECOC 2007, Booth 17095. The fiber enables fiber to the home/premise (FTTx) with a small bending radius and cable mounting inside and outside premises.

It reportedly enables tighter routing and higher fiber density for component design and fiber deployment in central offices, subscriber equipment, backplane solutions, and premise wiring. BEND-LITE (E) suits triple-play voice, video, and data service networks and access network installations. It is designed for high resistance to additional losses, due to macro bending at 1310-, 1550-, and 1625-nm wavelengths.