Verizon Communications (NYSE: VZ) continued to add subscribers to its FiOS TV and Internet ranks, but at a slower pace that reflects the carrier's policy of selling the service only in existing markets.
In the first quarter, Verizon said it added 57,000 FiOS video customers and 98,000 FiOS Internet subscribers. This was down compared to the fourth quarter of last year when the carrier added 92,000 video subs and 126,000 more for Internet.
The numbers reflected two Verizon priorities: growing revenue, and moving subscribers from existing copper-based facilities. Overall, Verizon revenues of $30.8 billion were 4.8 percent higher year-over-year and "the company's highest quarterly growth rate in the past five years," a Verizon press release stated. In addition, 78,000 customers were migrated from copper to FiOS-capable networks.
Operating income results were even more impressive at $7.2 billion, a 15.1 percent year-over-year increase driven by "effective cost management," the carrier said.
In the wireline space, Verizon listed consumer revenues of $3.8 billion, 6.2 percent higher than the first quarter of 2013, and ARPU (average revenue per user) of $120.17, which is 11.3 percent higher year-over-year. FiOS consumer revenues grew 14.6 percent year-over-year and total FiOS revenues grew 15.5 percent, the company said, allowing total quarter FiOS revenue to surpass $3 billion for the first time.
The results reflected Verizon's decision to sell FiOS only in existing markets and not to expand the FiOS footprint--even to adjoining communities. Internet penetration was 39.7 percent, up from 38.2 percent a year ago, and video penetration was 35 percent compared to 34.1 percent in 2013. FiOS now passes 18.9 million premises with 6.2 million subscribed to Internet and 5.3 million to video.
Verizon also noted that 51 percent of Internet subscribers take FiOS Quantum service which delivers 50 to 500 Mbps. This is up from 46 percent in 2013.
As has been the case in recent quarters, Verizon was more focused on its wireless business which, in the first quarter, reflected the impact of Verizon's acquisition of Vodafone's share of the business.
"With the wireless transaction now behind us, we have great confidence in our ability to sustain these strong results," Verizon Chairman-CEO Lowell McAdam said in a press release.
- see the earnings release
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