Intellectual Property Law

Verizon FiOS TV Sub. Count Tops the Million Mark

By Cynthia Brumfield

Verizon issued its Q4 07 earnings release this morning showing a 5.5% rise in adjusted revenue and 3.9% growth in profits, with the telco's fiber-to-the-home FiOS and Verizon Wireless services the bright spots in the company's portfolio. Revenues grew to $23.84 billion, up from $22.6 billion in the year-ago quarter, while net income advanced to $1.07 billion, up from $1.03 billion in Q4 06.

Verizon's costly fiber build-out seems to be paying off. The company announced that it has now crossed the million-subscriber threshold for its FiOS TV service. During Q4 07, Verizon continued to post accelerating gains in the number of net new FiOS TV customers, adding slightly more than a quarter million net new FiOS TV customers. By quarter's end, Verizon served 943,000 FiOS TV homes -- combined with the number of homes that buy DirecTV-branded video service, Verizon had a video customer count of 1.8 million.

FiOS high-speed data services continued to grow at a healthy clip during the quarter. The company added around 200,000 net new FiOS high-speed customers, compared to 165,000 net new FiOS high-speed adds during Q4 06 and 233,000 net new FiOS adds during Q3 07. By quarter's end, Verizon had 1.5 million FiOS broadband customers. Combined with its much-larger DSL customer base, Verizon's broadband subscriber count stood at 8.24 million by the end of 2007.

Given the top-priority emphasis placed on FiOS, Verizon's once-torrid DSL business is cooling. During Q4 07, Verizon added only 64,000 net new DSL customers, a major drop in comparison to the 217,000 net new DSL additions during Q4 06. During the company's earnings call CFO Doreen Toben said that Verizon's DSL services will get a shot in the arm during 2008, with a new 7 Mbps product slated for roll-out later this year.

Verizon Wireless was an even bigger contributor to Verizon's growth, with the mobile service arm of the telco adding a little more than two million net new customers (slightly down from the 2.4 million net new wireless adds during Q4 06) during the quarter to reach a year-end tally of 65.7 million customers. Revenues for Verizon Wireless grew by 13% to $11.4 billion, with data service revenues on a steep incline, jumping by 53% to $2.1 billion.

The weak link for Verizon, as is true of all incumbent landline carriers, is the local landline voice business. During the quarter, Verizon continued to lose traditional voice customers, with total access lines dropping by 910,000 to settle at 41.4 million by year-end.

During the company's earnings call, Toben reiterated that Verizon isn't seeing much of a slow-down in growth due to the recession. "We have not seen a change in sales expectations through January. We expect 2008 to be a solid year," she said.

Full post as published by IP Democracy on January 28, 2008 (boomark / email).