The nation’s number two telco, Verizon Communications, issued its Q1 07 earnings report this morning showing mild growth in revenue and an 8% drop in profits but continued strong gains in high-speed Internet service, IPTV video service and wireless telephony. Revenues advanced 6.4% year-over-year to $22.6 billion, but net income dropped 8.4% to $1.5 billion as the telco continued to absorb costs associated with its fiber-to-the-home FiOS network build-out.
Even if investors get temporarily disappointed in the earnings write-off triggered by FiOS, the network upgrade strategy is paying off (and, as Larry Dignan points out, the bulk of the capital spend is over.) Verizon added 177,000 net new FiOS high-speed customers during the quarter, roughly on par with the growth rate in Q1 06 and up from Q4 06 levels. Verizon ended the quarter with 864,000 FiOS data customers, more than triple its FiOS high-speed customer count a year ago.
FiOS TV gained momentum during the quarter, with Verizon adding 141,000 FiOS TV customers during the quarter, up 50% over the net FiOS TV gains during Q4 06 and a far cry from the 10,000 net new FiOS TV subscribers added during Q1 06. By quarter’s end, Verizon had 348,000 FiOS TV customers, representing 11% of homes capable of buying the competitive multichannel video service.
But, not all new service gains were attributable to FiOS — Verizon added 239,000 DSL customers during the quarter. Altogether, Verizon’s broadband subscriber count (FiOS and DSL) advanced by 416,000 to reach 7.4 million by quarter’s end.
Verizon’s DirecTV partnership continued to pay off in gains of old-fashioned TV customers. During the quarter, Verizon added 78,000 DBS subscribers and wrapped up Q1 07 with a total video customer count (FiOS plus DBS) of nearly one million, or 966,000.
Wireless, of course, was another growth engine for the telco. Verizon Wireless added 1.66 million net new mobile voice customers during the quarter, roughly on par with Q1 06 net adds, to reach 60.7 million mobile customers by quarter’s end. Wireless revenue jumped 17.1 to $10.3 billion, while Verizon continues to ramp up the number of wireless data customers, which grew to approximately 36 million by quarter’s end, up 10 million from Q1 06 levels.
| Verizon Selected Operational Statistics | |||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | |
| Total access lines | 47.97 | 46.95 | 46.00 | 45.08 | 44.15 |
| Change | (0.83) | (1.02) | (0.95) | (0.92) | (0.93) |
| Broadband Customers (000) | 5,685 | 6,125 | 6,600 | 6,982 | 7,398 |
| % growth | 11% | 8% | 8% | 6% | 6% |
| % of total lines | 11.9% | 13.0% | 14.3% | 15.5% | 16.8% |
| Quarterly adds (000) | 541 | 440 | 448 | 409 | 416 |
| % chg. in quarterly run rate | -12% | -19% | 2% | -9% | 2% |
| DSL Customers (000) | 5,421 | 5,750 | 6,078 | 6,295 | 6,534 |
| Quarterly adds | 357 | 329 | 328 | 217 | 239 |
| FiOs HH Passed (000) | 3,600 | 4,500 | 5,300 | 6,100 | 6,800 |
| FiOS Data Subs. (000) | 264 | 375 | 522 | 687 | 864 |
| Net Change | 184 | 111 | 147 | 165 | 177 |
| HH Capable for Sale (000) | 2,600 | 3,100 | 3,800 | 4,800 | 5,400 |
| Penetration of Capable HH | 10% | 12% | 14% | 14% | 16% |
| FiOS TV Subs. (000) | 20 | 55 | 118 | 207 | 348 |
| Net Change | 10 | 35 | 63 | 89 | 141 |
| HH Capable for Sale (000) | 413 | 692 | 1,200 | 2,400 | 3,164 |
| Penetration of Capable HH | 5% | 8% | 10% | 9% | 11% |
| Customers (mil.) | 53.0 | 54.8 | 56.7 | 59.1 | 60.7 |
| Total Customer Churn | 1.29% | 1.13% | 1.24% | 1.10% | 1.08% |
| Video Customers, DBS (000) | 415 | 485 | 496 | 540 | 618 |
| Change | 66 | 70 | 11 | 44 | 78 |
| Total Video Customers | 435 | 540 | 614 | 747 | 966 |
Cynthia Brumfield at 10:57 AM|Comments(0)
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