Verizon Communications (NYSE:VZ) revealed that the company's FiOS TV and Internet service has achieved 50 percent penetration in Dallas, the company's first market. Speaking at the J.P. Morgan Global Technology, Media and Telecom Conference today, Verizon EVP and CFO Fran Shammo said the company hit 50 percent penetration in Dallas and he expects the penetration rate to grow in other markets as well.
Shammo said FiOS is gaining penetration in its markets and he is "confident" the company will achieve its goal of 600,000 net adds by year-end.
However, he noted that during the summer months, the company does see higher churn in its FiOS product due to people moving out of FiOS coverage areas.
Shammo also said Verizon continues to see a huge uptick in the FiOS Quantum Internet service, adding that many customers are choosing the 50 Mbps bucket, which Verizon offers for an additional $10 to $20 depending upon the service plan. Interestingly, Verizon also said nearly 60 percent of new FiOS Internet subscribers added in the first quarter chose Quantum speeds of 50/25 Mbps or faster. Last month, Shammo told investors during the company's earnings call that about 27 percent of FiOS Internet subscribers are on one of the Quantum tiers.
Shammo said he believes there will be more convergence between wireline and wireless in the next year or two, as content rights change and people are allowed to take their content with them. He said that's why it was so important for Verizon to team with the cable companies. Last year, Verizon Wireless formed a joint venture with cable MSOs Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), Bright House Networks and Cox Communications. At an investor conference earlier this month, a Verizon executive hinted that the new products from the venture will likely launch in the fourth quarter.
"We believe that the consumer will want to have a seamless experience inside the home and outside the home," Shammo said.
In other Verizon news, the company's Verizon Wireless unit will pay a $7 billion dividend to parent companies Verizon Communications and Vodafone by the end of June, diffusing a potential source of tension between the two parents as speculation continues to burble that Verizon will buy Vodafone's 45 percent stake in the joint venture.
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This article was updated to reflect that the 50 percent penetration rate in Dallas was for FiOS TV and Internet service, not TV alone.