Verizon's latest results reveal it has added another 202,000 FiOS TV customers, giving it a total of 707,000 customers using its multi-channel service. That's 3,200 new units each working day. Combined with its bundled Direct TV customers Verizon now has 1.5 million video customers and with penetration running at over 15 percent in markets Verizon operates in, it is no wonder Comcast and others are chasing telephony and data revenues.
On the internet side Verizon added 202,000 FiOS customers and another 56,000 DSL customers leaving it with 8 million broadband internet customers, up 23 percent for the year as subscribers continue to switch off their basic dial up services. The growth in both broadband and video contributed to a 67 percent increase in broadband and video revenue year on year, compared with 55 percent for the previous year. The results are impressive--especially in a slowing economy--but the big question is whether all the effort of rolling out fiber and bundling TV, Internet, and telephony (wired and wireless), is stemming the landline turn off rate?
According to Verizon CFO, Doreen Toben, big picture the total number of bundled retail customers was up 1.4 million to 7.4 million for the year, despite another 664,000 customers turning off their land line in Q3 alone. In Rhode Island--where FiOS is well established--she said Verizon had actually experienced line growth.
At the same time, the big growth in internet usage is coming primarily from FiOS, with Verizon President Denny Strigl admitting to analysts it was the lightning speed of fiber that was prompting cable customers to make the switch. He also predicted FiOS would go EBITDA positive next year. It is early to make the call, but with consumer ARPU up a healthy 10.8 per cent for the year, it does seem Verizon has found the solution to the most fundamental challenge facing the telco industry.