Verizon FiOS Drives Sub Growth In Q4

Adds 116,000 FiOS TV, 145,000 FiOS Internet Subs In Period
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Reversing recent trends that have seen the rate of growth for FiOS customers show signs of fading, Verizon Communications added more FiOS TV and Internet subs in the fourth quarter of 2014 than it did in the prior year period. 

Verizon said it added 116,000 FiOS video customers in the fourth quarter, up from 92,000 in the year-ago period, and tacked on 145,000 FiOS Internet subs, up from 126,000.

Verizon ended 2014 with 5.64 million FiOS video subs, good for a penetration rate of 35.8%, and 6.61 million FiOS Internet subs, for penetration of 41%.

Accounting for DSL declines, Verizon added 59,000 broadband subs in the fourth quarter of 2014, up from additions of 20,000 a year earlier.

On a year-over-year basis, however, overall FiOS sub growth did slow – the telco added 387,000 FiOS video subs in 2014, versus 536,000 in 2013, and signed on 544,000 FiOS Internet subs in 2014, compared to 648,000 in 2013.

FiOS customers continue to gravitate to the telco’s higher-speed tiers. At the end of 2014, 59% of residential FiOS subs took a “Quantum” tier, which provides speeds from 50 Mbps to 500 Mbps, up from 57% at the end of the third quarter of 2014.

On the financial end, Verizon generated $3.3 billion in FiOS-related revenues in the fourth quarter, up 11.6%. For the full year, FiOS revenues reached $12.7 billion, up 13.6% from $11.2 billion in 2013.

On the wireless front, Verizon added 2.1 million retail net connections, including 2 million retail postpaid connections in Q4. It ended the year with 35.6 million retail postpaid accounts. During the quarter, Verizon added 672,000 postpaid phones, as 4G smartphone additions of 1.5 million were offset by net declines in basic and 3G phones. It also added 1.4 million new 4G LTE tablets. Smartphones accounted for 78.6% of Verizon Wireless’ retail postpaid customer phone base by the end of 2014, up from 70% at the end of 2013.

Verizon posted total fourth quarter revenues of $33.2 billion, up 6.8% versus the year-ago quarter, while full-year revenues eclipsed $127 billion, up 5.4%. That was matched with a net loss of $2.2 billion (54 cents per share). Earnings of 71 cents per share fell a penny short of Bloomberg projections, though in-line with First Call expectations. 

Verizon, which recently launched a connected-vehicle service that, it claims, has an addressable market of more than 200 million vehicles, also broke out revenue from the Internet of Things and telematics – that totaled $585 million in 2014, marking an annual growth rate of more than 45%.

Looking ahead to 2015, Verizon expects consolidated revenue growth of at least 4%.