Faced with a stalling stock price and vocal skepticism from some industry analysts, Verizon Chairman and CEO Ivan Seidenberg kicked off the Citigroup Global Entertainment, Media & Telecommunications conference Monday by insisting his company’s $8 billion a year fiber-to-the-premises buildout is financially sound.

Stressing the dual benefits of new revenues and lower costs, Seidenberg also touted Verizon Wireless as “the industry’s premiere franchise” and said the acquisition of MCI would generate even more financial benefits that expected and do so more quickly.

But his major message, coming a week after Lehman Brothers urged a cutback in the FiOS FTTP plans for financial reasons was that Verizon is staying on track to pass 15 million to 20 million homes with fiber at the rate of three million per year, and will begin reaping financial rewards of that strategy soon.

Acknowledging that “investor questions have always surrounded the financial model associated” with FiOS, Seidenberg said Verizon is gaining more experience with the deployment, having passed three million homes in 2005 and believes the new network will deliver “the most bandwidth, the lowest lifecycle costs and the best customer experience.”

The FTTP approach already is showing lower trouble reports, in areas hit by bad weather, and promises new levels of network automation that will further drive out costs, he said. In addition, Verizon is poised to generate major new revenue through selling FiOS TV and other services.

“We can revamp the entire cost structure of the company,” Seidenberg said, and boost revenues, which have been “fairly flat over the last two years.”

“As productivity improves and we start to show the kind of returns we expect from this tech, we are getting closer to our near-term targets,” he added. “With increased penetration and productivity, we will build a significant business model that works.”

“We look at 06-07 as critical juncture points to start to see these changes take hold in our business,” Seidenberg said. “Investors ask me, ‘Why don’t you cut your capital spending by one billion like AT&T does and generate a lot more earnings?’. That’s true, we could do that. But in the long term creating a competitive network of the future that competes with cable and gives us the best chance for a stable sustainable increase in revenue growth comes with capital infusion in the business at this point.”

The good news about the MCI merger is that the company will deliver a 10% improvement in the synergies promised when the acquisition was announced, Seidenberg said, and expects lower transition costs than initially predicted.

“We will be able to realize force reductions quicker and be able to migrate traffic” onto the combined network, and away from more expensive facilities leased from other carriers, he added.

Verizon has created an organization, Verizon Services, to manage procurement, real estate, human resources administration, and financial operations for all three units – Verizon Wireless, Verizon Telecom and Verizon Business, which includes most of the MCI operations. The economies of scale the service organization can bring will lower costs across the company, Seidenberg promised.