Stocks/Earnings

Verizon FiOS Sub Growth Slows In Q2

But Still Gains In All Product Categories 7/22/2014 8:15 AM Eastern
TakeAway

Adds 100,000 FiOS Video Subs, 139,000 FiOS Internet Customers

Verizon Communications continued to grow customers for its fiber-fed FiOS platform in the second quarter, but the rate of growth also continued to show signs of slowing in the period.

 

Verizon added 100,000 FiOS video subs in the quarter, versus 140,000 in the year-ago quarter, extending its total in the category to 5.41 million, up 7.6%.

 

The telco signed on 139,000 FiOS Internet customers, down from 161,000 additions a year ago, giving it a total of 6.3 million FiOS Internet subs, up 9.3%. With DSL losses factored in, Verizon added 46,000 total broadband subs in the period, flat from 45,000 net broadband adds a year earlier. Verizon ended the period with 9.1 million total broadband connections, a 1.5% increase.

 

By the end of the second quarter, 55% of FiOS subs took a “Quantum” tier, which offers speeds ranging from 50 Mbps to 500 Mbps, up from 51% at the end of the first quarter, the company said.

 

Verizon added 90,000 FiOS Digital Voice connections, versus 286,000 in the year-ago period, giving it a total of 4.44 million, up 16.3% from the year-ago period.

 

Verizon said its FiOS network passed 19.3 million premises by the end of the quarter. FiOS Internet penetration reached 40.1%, versus 38.6% at the end of the second quarter of 2013, while FiOS video penetration hit 35.3%, up from 34.5%.

 

As part of a customer acquisition and retention strategy, Verizon has been beefing up its FiOS video and broadband products in recent months. Earlier this week, it announced that it is upgrading its upstream capabilities in order to deliver symmetrical speeds for all FiOS Internet tiers, giving it a differentiator to use against cable competitors. On the video front, Verizon recently completed the rollout of FiOS Quantum TV, a service that is centered the Arris-made Verizon Media Server, a whole-home HD-DVR outfitted with six-tuners and 1 terabyte of storage.

 

Total revenues for wireline reached $9.8 billion, up 0.3% year-over-year. Verizon said it marked the first quarter year-on-year increase in total wireline revenues in more than seven years. Total FiOS revenues rose 14.4%, to $3.1 billion.

 

Verizon posted total second quarter revenues of $31.5 billion, up 5.7%, and earnings of $1.01 per share, up from 78 cents per share a year earlier. Second quarter results included an after-tax gain of $434 million (10 cents per share) tied to the sale of 700 MHz A Block spectrum licenses.

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