Verizon earnings

Verizon posts 263K TV customer boost

Tue, 29 Apr 2008 06:59:50 -0400

Verizon Communications this week reported a 9.8% increase in profit for the first quarter of 2008. Verizon said net income totaled $1.64 billion, with revenue rising about 5.5%. Much of the growth came from Verizon Wireless, but Verizon FiOS TV service continue to be secondary source of strength. The telco reported that FiOS TV subscribers increased by 263,000 FiOS TV customers during the quarter, giving a total of about 1.2 million TV customers.

AT&T last week reported it had gained about 148,000 U-verse TV customers, so the two largest telcos won over more than 400,000 TV customers in the first three months of this year. That can't be good news for a cable TV industry that has been knocked around competitively by AT&T and Verizon since last year.

For more:
- see this story at The Wall Street Journal
- and this blog post at ZDNet.com

Related articles:
AT&T last week reported 148,000 new IPTV customers. AT&T report
Verizon hits 1 million FiOS subscriber mark Verizon report

Can Verizon defy gravity?

Tue, 29 Jan 2008 06:59:55 -0500

Call me a skeptic but I just don't believe Verizon has dodged the slowing economy. A company that takes in nearly $100 billion in revenue from mostly the U.S.--bigger than the vast majority of world governments--and has more customers than most European countries--will just have to feel it in their sales numbers as the U.S. economy continues what is a major slowdown, if not yet a recession.

Verizon CFO Doreen Tobin in a Webcast yesterday said she pores over Verizon's revenue data each day and, apart from softness in the Midwest, had yet to see any trend line decline. She claimed the bundling of FiOS TV and high-speed Internet with basic telephony was immunizing the giant telco from the economy.

In case anyone had not noticed the Federal Reserve last week pushed through an emergency 0.75 per cent rate cut--the biggest in 23 years--on top of the four successive reductions since September. And there may be further cuts this week. That sounds like a central bank playing catch up and/or panicking and, in the face of what remains bullish inflation, confirms what the Fed's boffins really think is happening.

History says it takes around 14 months for a business cycle to recover and the scary point is we don't know if we are anywhere near the bottom of a decline largely driven by commercial banks refusing to renew credit. The raw data is full of worst numbers in 20/30/40 years, and that all suggests 2008 is not going to be pretty. Bundles or no bundles. -Tom

Will FiOS be the first victim of a recession?

Tom Burton — Tue, 29 Jan 2008 06:59:50 -0500

Verizon's aggressive FiOS roll out could definitely be one of the items COO and President Denny Strigl has to review if his sunny optimism about 2008 proves mis-founded. Verizon was celebrating their one millionth FiOS TV customer yesterday and have plans to roll past another 3 million homes this year. But the reality is it is the broadband service that is really driving FiOS take up, rather than the need to replicate either a cable or satellite pay-TV service. While there are a million fiber TV homes, there are 1.5 fiber Internet homes

Strigl suggested just this at the Q3 conference call last year--that the demand for high speed Internet is what is really driving fiber take up. This was also obvious from the numbers yesterday with DSL growth virtually stalled and Strigl admitting Verizon was seeing a migration from DSL to fiber and wireless broadband. Given the entry prices for fiber Internet are lower than standard DSL pricing, it is going to save cap-ex and lift revenue if Strigl simply decides to slow the fiber deployment. This may upset the New York types agitating for Verizon to finally put them on the roll-out plan, but will settle investors who have now been given a very bullish guidance for 2008.

For More:
- Transcript of Verizon's conference call yesterday
- Verizon celebrates one million FiOS TV customers Release

Related articles:
See our special section with all the coverage of Verizon's Q4 earnings
Spotlight: Verizon FiOS turns two Report
Verizon FiOS TV tops 200K subscribers Report

FiOS TV breaks through one million user mark

Tom Burton — Mon, 28 Jan 2008 14:03:30 -0500

Verizon has announced its optic fiber television service now has more than one million customers and is expecting to continue the aggressive roll out with over nine million homes to be passed by end of 2008. This compares with 5.9 million at the end of 2007. The service which began 28 months ago is now the tenth largest cable television system in the US and with an average sign up rate of 16 per cent of homes passed is expected to continue its rapid growth.

The announcement of one million customers for Verizon’s fiber to the home television service coincided with the telco's Q4 results and compares with 231,000 subscribers AT&T had signed up for its U-Verse IPTV service at the end of 2007. “Some experts doubted that we could come this far this fast,” said Virginia Ruesterholz, president of Verizon Telecom. “We launched FiOS TV just 28 months ago in one Texas market. We are delighted to pass the 1 million milestone," said Ruesterholz.

Verizon resells Direct TV and now has more of its own customers than subscribers of the satellite service, with a total customer base of 1.8 million subscribers. Verizon has now surpassed the total number of customers served by Cable One, which reported just over 699,000 customers at the end of the third quarter and should over take, the ninth-largest competitor, Mediacom Communications (1.3 million customers) by mid year.

Verizon has aggressively marketed the service offering a free HD TV for sign ups during the winter period and announcing it will have 150 channels broadcast in HD format by the year end. Verizon rolled out its own interactive media guide last year and this is to be upgraded with games and widgets during 2008.

The service is delivered using radio frequency spectrum down the optic fiber with interactivity part of an IP overlay network. Verizon President Denny Strigl told an investor call Monday FiOS TV was proving to be an effective means of retaining customers with line loss lowest in regions where FiOS TV and broadband were available.

For full coverage by our expert Fierce reporters and commentators of the Verizon Q4 results and expectations for 2008 go to our Verizon special report.

For more:
- Verizon Q4 Results Release