Light Reading

Verizon FiOS Slows Down Again

Alan Breznick
4/24/2014
50%
50%

In a sign that its FiOS platform may have saturated the market, Verizon Communications Inc. (NYSE: VZ) reported Thursday that it signed up far fewer new video and broadband subscribers in the first quarter. Verizon also signed up significantly fewer TV and data customers for FiOS than AT&T Inc. (NYSE: T) did for its similar U-verse suite of services. (See AT&T U-verse Gains Broadband, Video Subs.)

Verizon picked up just 57,000 FiOS Video customers in the winter quarter, down markedly from 92,000 customers in the previous quarter and 160,000 a year ago. As a result, the telco ended the quarter with 5.3 million FiOS Video subscribers, still more than most US cable operators but increasingly less than U-verse's total.

Likewise, Verizon netted a relatively modest 98,000 FiOS Internet subscribers over the first three months of the year, as it continued to switch its dwindling base of copper DSL subscribers over to its fiber network. That's well below the 126,000 new subscribers that it added in the fourth quarter and the 188,000 that it added a year earlier. Verizon closed out the quarter with 6.2 million FiOS high-speed data subscribers, more than most cable operators again, but now well behind U-verse.

The growth slowdown appears directly related to Verizon's decision not to extend FiOS's reach beyond its existing markets. Although the penetration rates for FiOS's two main services continue to edge up, both take rates have now scaled 35% of the homes in FiOS markets, indicating that there's little room for more growth. Verizon now offers FiOS to 18.8 million homes, far fewer than AT&T has accumulated in its still-expanding U-verse universe.

Not surprisingly, Verizon executives played down FiOS's decelerating growth in its earnings report this morning. Instead, they stressed the still-growing penetration rates for FiOS Video and FiOS Internet, which now stand at 35.0% and 39.7%, respectively. They also emphasized the healthy increases in FiOS revenues, which rose to $3 billion in the quarter, up 15.5% from the year-ago period.

Verizon officials said that a majority (51%) of their FiOS Internet subscribers now take FiOS Quantum, its highest broadband tier with download speeds of 50 Mbit/s to 500 Mbit/s. That's up from 46% of FiOS Internet subs at the end of last year.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(30)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
OldNHMan
50%
50%
OldNHMan,
User Rank: Light Beer
5/1/2014 | 2:51:21 PM
Re: Unfortunate
I have certainly seen smaller operators doing well deploying fiber, even in low density semi-rural and rural areas. One such, TDS, just bought out a small telco in a nearby town here in NH and has started running fiber along all of the existing copper. Their plans are to decommission the copper after the fiber build-out has been completed. The copper is in such bad shape it was cheaper for them to replace it with fiber than to build out new copper. I don't know if they're building out using PON architecture or point-to-point, but this isn't the first time they've done this. It appears they've been able to make it work. I guess they don't feel the need for a quick turnaround and are willing to go for the long term return.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
4/29/2014 | 9:13:01 AM
Re: Unfortunate
 

MMQoS,

No sir, I was an executive at AFC.

seven

 
MMQoS
50%
50%
MMQoS,
User Rank: Light Sabre
4/29/2014 | 4:06:12 AM
Re: Unfortunate
brook:

So you were a semiconductor (ASIC guy at AFC)?  Even more interesting as I was a network architect at National Semi for Ethernet, FDDI and hate to admit it but ATM, then moved to Nortel R&D as a sytems guy and was FSAN lead.

Enjoyed working with the triBoC on the PON project after being one of the founders of MEF.  Still frustrated though with slow VDSL from at&t in my locale.

MMQoS

 
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
4/28/2014 | 11:38:54 PM
Re: Unfortunate
MMQoS,

Yes, there is a relatively (compared to NY + Boston + Philly) small number of subs in SoCal.  There are slow growth parts of AT&T (mostly in the former Ameritech properties).  But if you compare the overall demographics you will see that Verizon has a lot higher percentage of low/no growth properties.  If you look at the way that Verizon has sold off properties, they only kept the growth GTE properties.  Texas - Florida - California.

As an aside, SoCal used to have the highest percentage penetration of FiOS - even higher than Keller.

I have no idea if you know me or not.  I was not a big fan of going to FSAN meetings and I used to send our systems guys to them.

seven

 
MMQoS
50%
50%
MMQoS,
User Rank: Light Sabre
4/28/2014 | 9:37:18 PM
Re: Unfortunate
seven:

You hit the nail.  As one of the creators of GPON in FSAN, many times we discussed that once the fiber is into the home you win.  It is just the cost of deployment and maybe more, getting the municipalities to allow free access. 

So while I agree that LR posters etc need to do their homework, I don't agree with you that "Verizon is located in primarily low growth to negative growth population states."  When you worked for AFC you should remember that there are a lot of Vz (ex GTE) subs in So. Calif.  I think that the reason is surely ROI but more that Ivan and Mark are no longer execs and the VZ Wireless crew is running the show.

BTW do we know each other?

MMQoS   
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/28/2014 | 12:15:10 AM
Re: Unfortunate
Is it possible that Verizon might not see the investment in FiOS as worth the payoff. Is the subscription rate meeting their goals and expectations? In other words, in the areas served are a sufficiently large percentage of households subscribing to the service to make it pay off?
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
4/27/2014 | 9:31:44 AM
Re: Unfortunate
Ah, I had heard the opposite from Verizon customers.  Is this relatively new?
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
4/27/2014 | 8:34:24 AM
Re: Unfortunate
There may be limited growth as costs rise and customers determine it's just not worth the extra tariff to get those higher speeds. It's still surprising to me just how slow a connections allows one to view video without problems. Why pay for super high speed at double or more the cost when an economy price will do the job for most consumers.
unbearable
50%
50%
unbearable,
User Rank: Light Beer
4/26/2014 | 6:23:39 PM
Re: Unfortunate
The "many" who are paying $70 for Google's product are located in cherry-picked cities and cherry-picked neighborhoods, where Google campaigned for years to entice the population to pressure their politicians to give Google a free pass on regulatory hurdles and have the taxpayers assume the corporate liability for the network.

Whether these chosen cities are profitable or not, will likely never be known - despite their celebrity status among writers like you, and despite their pledge to not be evil, they are certainly not going to be forthcoming with the actual financials for each Fiberhood, especially if such disclosures might threaten their ability to maintain their 3% net corporate tax rate or subject them to anti-trust scrutiny.

I can only imagine the headlines you'd write if Verizon did the same, and required entire neighborhoods to take a loyalty pledge - prefund and sign contracts, prior to obtaining service commitments for Fios.

 

 
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
4/26/2014 | 3:34:39 PM
Re: Unfortunate
The phone company here, CenturyLink, is offering 12-40Mbps fiber speeds for $20 a month (for one year or else for multiple years if you bundle with phone service).

I don't know what happened with FiOS except that it seems like they've taken an exceedingly long time to roll it out, and then there's word of Google maybe offering 10Mbs speeds for free (charging only for their 1Gbps service).

Can anyone tell me -- with fiber -- do all these companies run their own fiber cables?   The reason for monopolies in cable TV was that they didn't want to have run 3, 4 or 5 cable lines in the same neighborhoods.   Isn't it the same with optical fiber?  

 

Really, I thought it was the local phone companies who laid fiber to the COs for VoIp and that we are only talking about the last mile from the CO to the home for fiber.  Or does each company (google, FiOS, CenturyLink) have its own complete network from home to backbone?
Page 1 / 3   >   >>
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
LRTV Custom TV
DOCSIS 3.1: Transforming Cable From Hardware-Defined Network to Software-Defined Network

4|29|15   |   03:48   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explains how DOCSIS 3.1 can transform cable HFC network to a more agile software-defined network.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
10 Alternate Uses for Tablets
Eryn Leavens, Copy Desk Editor, 5/22/2015
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Comcast Targets 6 New Gigabit Markets
Mari Silbey, Senior Editor, Cable/Video, 5/21/2015
Chattanooga Charts Killer Gigabit Apps
Mari Silbey, Senior Editor, Cable/Video, 5/20/2015
Potholes Lurk in Indian Smart City Project
Gagandeep Kaur, Contributing Editor, 5/22/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
My ongoing interview tour of the leading minds of the telecom industry recently took me to Richardson, Texas, where I met with Rod Naphan, CTO and SVP, Solutions, ...
I recently popped down to Texas to chat with CEO Eric L. Pratt about his company, Taqua.
Cats with Phones
Too Fluffy to Talk Click Here
Elmer found that his bountiful fur got in the way of meaningful conversation.