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Verizon, the US telecommunications group, has made its advanced fiber optic network potentially available in more than 3m homes or businesses in 16 states and said it is “encouraged” by the uptake of its Fios TV service.

Ivan Seidenberg, Verizon’s chief executive, underscored the group’s commitment to its new fibre optic network designed to enable Verizon to compete directly with cable TV operators in comments made during a Citigroup investor conference in Phoenix, Arizona.

In Keller, Texas, the first market where Verizon has offered the Fios TV service, Mr Seidenberg said the company now has a market penetration of about 20 per cent since it was launched in late September. He added that Verizon continues to see strong demand and growing momentum for all data services, including Fios broadband and DSL services.

His comments, echo those made recently by executives at rival AT&T which is also rolling out TV and video services using similar advanced technology.

Last week, in comments made during the Consumer Electronics show in Las Vegas, Lee Ann Champion, AT&T’s senior executive vice-president for IP (Internet Protocol) operations and services said she is “pleased” with the controlled rollout of AT&T’s IPTV-based Project LightSpeed. She said the technology is performing well and early customers are enthusiastic about the service.

Both Verizon and AT&T have seen their share price depressed over the past year, in part because of investor concern about their heavy capital expenditure on the new networks and doubts about likely uptake.

On Monday however, Mr Seidenberg said that, besides being a catalyst for new products, Verizon’s fiber network is driving operational and productivity improvements that will enable the company’s wireline business to sustain margins.

In addition he said he expects 2006 to be the peak year for total wireline capital spending, as the company’s capital expenditure mix continues to shift from legacy technologies to fiber and IP.

The company previously announced that it would pass an additional 3m homes and businesses in 2006 extending the new network to about 20 per cent of Verizon’s landline service territory. Verizon’s goal is to pass about 60 per cent of the homes and businesses in its landline service territory with fiber.

Meanwhile Mr Seidenberg said he sees further growth opportunities, particularly in the business market following the MCI merger, for Verizon Wireless, Verizon’s joint venture wireless carrier with Britain’s Vodafone.

He cited last week’s launch of V CAST Music, Verizon Wireless’ new digital music download service, as an example of the innovation and new products that continue to drive wireless growth.

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