Stocks/Earnings

Verizon FiOS Sub Growth Slows in Q3

Ends With 6.9M FiOS Internet, 5.8M FiOS TV Subs 10/20/2015 11:45 AM Eastern

FiOS subs at Verizon Communications continued to rise in Q3 but at a slower rate versus the year-ago period.

 

Verizon added 114,000 net new FiOS Internet subs, and 42,000 net new FiOS video connections in the third quarter of 2015, down from 162,000 FiOS Internet  subs and 114,000 FiOS video subs in the year-ago period.

 

On the brighter side, Q3 FiOS subs additions were better than what Verizon pulled in during the traditionally slow second quarter of the year.

 

Verizon ended the period with 6.9 million FiOS Internet customer and 5.8 million FiOS video subs, representing increases of 7.2% and 5%, respectively.

 

But revenues on the video side slowed due in part to customers taking the company's recently introduced, skinnier "Custom TV" offering. "As we expected, there was a change in the consumer revenue growth trajectory," company CFO Fran Shammo said on Tuesday's earnings call, according to Light Reading. "The primary reason for the decline is driven by lower pay-tv subscriber growth, and an increase in customers right-sizing their existing bundles."

 

At the end of the quarter, FiOS Internet penetration was 41.7%, while FiOS video penetration was 35.6%.

 

Verizon said two-third of residential FiOS Internet customers were on a Quantum tier, which provides speeds ranging from 50 Mbps to 500 Mbps. It saw the highest rate of growth with its 75 Mbps offering, which now represents about 25% of all subs on a Quantum service.

 

Verizon ended Q3 with 9.22 million total broadband connections, up 0.8% year-over-year, a number that factors in DSL sub numbers.

 

Overall, Verizon posted Q3 earnings of $1.04 per share on revenues of $33.2 billion. Analysts were expecting earnings of $1.02 on revenues of $32.94 billion.

 

On the wireline side, consumer revenues were $4 billion, up 2.8% from the year-ago quarter. FiOS revenues, which grew 7.5% to $3.4 billion, represented 79% of that total.

 

Verizon shares were up 67 cents (1.5%) to $45.37 each in mid-day trading Tuesday.

 

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