News

Mass. Slowdown For Verizon FiOS

4/12/2010 12:01 AM Eastern

About a week after Verizon
Communications said it was
nearing the end of its $23 billion
FiOS buildout, data from the Massachusetts
Department of Telecommunications
and Cable suggest
consumer uptake of the service
is already slowing considerably.

The Massachusetts DTC — the
only state regulatory body in the
U.S. that releases detailed city - by-
city cable, satellite and telco
video-subscriber data to the public
— is an often-cited basis for nationwide
telco video-subscriber
projections.

Sanford Bernstein cable and satellite
analyst Craig Moffett spotted
three key points in the DTC data:
new potential subscribers passed
by FiOS plant slowed in 2009; net
FiOS subscriber growth slowed;
and cable’s competitive losses to
FiOS moderated.

According to the data, FiOS subscriber
additions were down sharply
in 2009 — 66,000 versus 81,000 in
2008. Comcast, the dominant cable
operator in the state, lost about
29,000 subscribers in the Bay State
during the year, a 1.8% decrease.

The gap between FiOS gains and
Comcast losses are largely attributed
to satellite TV providers, Moffett
concluded. He estimated satellite
sales accounted for as much as 42%
of FiOS gains.

“Broadly speaking, the results confirm
our expectation that Verizon’s
video gains likely peaked in 2009 and
are set for a modest decline in 2010
and a sharper drop thereafter, due to
declining incremental passings and
the front-end loaded nature of FiOS
penetration,” Moffett wrote.

“Conversely, we expect the cable
industry’s competitive subscriber
losses to moderate progressively
post-2009.”

Verizon disclosed late last month
that it would focus on building out
the communities where it already
has franchises.

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