Verizon: Focus is on TV Everywhere, growing FiOS penetration

Verizon plans to turn more of its attention to expanding its FiOS TV service as it looks to recoup the $23 billion it cost the telco to build out its fiber network, and said that getting content onto mobile devices is more importat than develping its own out-of-footprint over-the-top delivery service--for the moment.

During Verizon's earning call last week, the telco said it had expanded its FiOS TV subscriber base by 192,000 customers to close the first quarter with 3.7 million subscribers.

Verizon EVP and CFO Francis Shammo said the wireline segment of the company was starting to see a turnaround in its financials, performing better year-over-year as FiOS services--both broadband and video-continued to drive change in the company's revenue mix.

"If the economy starts to stimulate a bit, and we continue to obviously penetrate on the FiOS side, I think there is a point where we could actually see some top line growth out of the Wireline segment," he said.

FiOS now accounts for 54 percent of consumer revenue, up from 45 percent a year ago, he said, with FiOS revenue in the quarter growing 23.7 percent year-over-year and FiOS ARPU now at more than $146.

"The continued penetration of our broadband and video products have increased the scale of our FiOS platform, and it is now significant enough to more than offset the secular and competitive pressures in this part of the business," Shammo said. "Our renewed focus on driving penetration in existing markets has been effective and we are pleased with the overall progress in FiOS. We are off to a good start this year and our pipeline for TV services are up 43 percent year-over-year."

How that plays out for a possible Verizon over-the-top offering remains to be seen. While Shamo discounted the idea that Verizon would attempt to offer a nationwide over-the-top play out of its service footprint, he didn't dismiss it completely.

Nor did he say that Verizon's mobile TV Everywhere play, which he pointed to as a priority, would mimic those offered by Cablevision and Time Warner Cabe, which limit where content sent to mobile devices--Apple's (NASDAQ:AAPL) iPad, for example--can be watched. Both services currently tether viewers to the home.

"Our concentration is to expand our penetration for FiOS right now," Shammo told Reuters in a telephone interview. "(OTT delivery is) something that we've looked at. It's not something that's top of mind for us."

Shammo said that Verizon's immediate concern is how to expand its mobile content offering to devices like Apple's iPad and iPhone, as well as other tablets and smartphones.

He said the company is actively negotiating with content providers to license content to mobile devices.

"That's the bigger issue on our minds, to put our content on mobile devices," he said.

For more:
- see this Reuters report
- see this earnings call transcript

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