IP Democracy: Verizon: FiOS TV Going Gangbusters

Verizon issued its Q1 06 earnings results today showing a rise in revenue (normalized to include both Verizon and MCI, which merged with Verizon in early January) but a drop in net income. Revenues rose 3.1% year-over-year to $22.97 billion, while net income dropped 7.1% to $1.6 billion due to increased sales expenses and merger costs.

The revenue up-turn is due to strong growth in high-speed and mobile services, which countered ongoing line losses.

Verizon Key Stats (in mil.)	1Q05	2Q05	3Q05	4Q05	1Q06
Total access lines	51.50	50.70	49.69	48.80	47.97
Net Access Line Loss	(0.80)	(0.80)	(1.01)	(0.89)	(0.83)
DSL Customers	3.86	4.41	4.53	5.14	5.69
Net DSL Adds	0.38	0.28	0.39	0.61	0.54
Verizon Wireless Customers	45.50	47.40	49.30	51.30	53.00
Net Wireless Adds	1.60	1.90	1.90	2.00	1.70

Verizon boosted its broadband subscriber count (DSL and fiber-based) by 540,000 net new customers during the quarter, a run-rate 47% higher than the 390,000 net new broadband customers added during the year-ago quarter. Verizon ended Q1 06 with 5.7 million high-speed customers.

Verizon Wireless continued its upward growth trend, with the company adding 1.7 million net new mobile customers during the quarter, a growth figure that tops the 1.6 million net new mobile customers added during Q1 05. By the end of the quareter, Verizon Wireless served 53 million customers.

The really interesting part of Verizon’s news came during the earnings call, when CFO Doreen Tobin shed some light on the company’s FiOS fiber-to-the-home initiative. FiOS currently passes 3.6 million homes, with high-speed service available in 15 states. According to Tobin, after 12 months post-launch, FiOS markets are achieving 17% penetration, more than halfway to the company’s goal of 30% penetration at the five-year mark.

Moreover, penetration is strong in the markets where Verizon has launched FiOS TV. Keller, TX, for example, has achieved a 24% penetration of capable homes in five months since launch.

FiOS Penetration as of 5/1/06
Market	% Share	Months Since Launch
Massapequa Park, NY	6.5%	3
Herndon, VA	10.0%	4
Tempe Terrace, FL	16.0%	4
Keller, TX	24.0%	5

Posted by Cynthia Brumfield on May 2, 2006 5:54 PM to IP Democracy