Verizon to debut LTE multicast in 2015

Verizon Communications (NYSE: VZ) will commercially launch its LTE broadcast network in 2015 enabling it to broadcast events, such as sporting events, to a large number of subscribers at the same time. Fran Shammo, Verizon's CFO, said that the company will have the LTE broadcast network ready in third quarter with commercial launch next year. Shammo announced this development during the company's second quarter earnings call today.

Fran Shammo, Verizon

Shammo (Source: Verizon)

The development is notable because Verizon has been talking about LTE broadcast technology for some time and earlier this year the company demonstrated LTE multicast technology at an event in Manhattan's Bryant Park.  The company, along with other wireless carriers, currently use unicast streaming technology to allow viewers to access live and on-demand content. Using multicast technology, Verizon will be able to more efficiently deliver content to a greater number of users. 

Shammo said that the company is currently embedding LTE broadcast chips in its handsets so the consumers have access to the technology. "We are working to get handsets in customers' hands," he said, noting that LTE multicast technology is a "breakthrough" in delivering video over wireless.

Shammo also said that the company is seeing strong uptake in the FiOS Quantum TV, which uses a Verizon Media Server with HD DVR and 1 terabyte of storage. Shammo said that 55 percent of FiOS subscribers in the second quarter selected FiOS Quantum, up from 51 percent in the first quarter.  FiOS Quantum provides speeds ranging from 50 Mbps to 500 Mbps.

Despite the strong performance by Quantum TV, the overall growth of FiOS slowed in the second quarter compared to the previous year. Verizon added 100,000 FiOS video subscribers in the quarter, down from 140,000 in the year-ago quarter.  

Nevertheless, the firm ended the quarter with 5.4 million FiOS video customers, representing a year-over-year increase of 7.6 percent.  The company said its penetration rate at the end of the quarter was 35.3 percent for FiOS Video, up from 34.5 percent. 

Overall the company reported operating revenues of $31.5 billion on the second quarter, a 5.7 percent increase compared with second quarter 2013.  In addition, Verizon reported an operating income margin of 24.4 percent for the second quarter, compared with 22 percent for the same quarter in 2013.  Consolidated EBITDA margin was 37.6 percent for the quarter, compared with 35.9 percent second quarter 2013.

Here's a breakdown of other key metrics:

Wireline financials:  Total revenues were $9.8 billion in the second quarter, up 0.3 percent year-over-year. FiOS revenues represented 75 percent of total consumer revenues of $3.9 billion. 

ARPU:  Consumer average revenue per user for wireline was $122.57 in second quarter, up 11 percent over second quarter 2013.

FiOS subscribers: Verizon added 139,000 FiOS Internet connections and 100,000 new FiOS video connections bringing total subscribers to 6.3 FiOS Internet customers and 5.4 million FiOS video customers.   

Copper-to-Fiber migration:  Verizon migrated 70,000 customers from copper to fiber in the quarter.

See FierceCable's 2Q  earnings pay-TV providers earnings roundup

For more:
- see this press release

Related articles:
Verizon talking to TV manufacturers about supporting LTE Multicast programming
McAdam: Verizon talking to sports leagues, programmers about new streaming video models
Verizon buys cloud TV tech provider upLynk
Verizon: Intel OnCue acquisition will power new OTT video service, next-gen FiOS TV product