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Verizon not ready to bail on Fios TV
CEO Hans Vestberg says Verizon's Fios pay-TV product will stay in the mix even as the company continues to steer customers to streaming options with third-party partners.
3 Min Read
Verizon's Fios TV subscriber base continues to erode, but the company currently has no plans to exit the pay-TV business and shift all of its video focus to partnerships with third-party streaming services.
"On the Fios side, of course, we will continue with the video right now," Hans Vestberg, Verizon's CEO, said Tuesday on the company's Q4 2020 earnings call.
That was in response to an analyst who wondered if it made sense for Verizon to stay in the video business given a wireless strategy that has focused on bundles featuring premium streaming services such as Discovery+ and Disney+. Meanwhile, Verizon's broadband-led Mix & Match bundles promotes YouTube TV, Google's OTT-delivered pay-TV product, alongside packages that include Verizon's own Fios TV product.
Vestberg said Verizon will continue to offer Fios customers multiple options with respect to video and pay-TV.
"Ultimately, I want our customers to have choices," he said. But Vestberg also acknowledged that seeing Verizon's higher-margin Fios Internet base grow even as the Fios TV customer base declines is "good for us financially." But he wants that customer choice with respect to video to remain.
Broadband up, video down in Q4
The Fios story followed a common theme in Q4 2020 – broadband was strong as video declined.
Verizon lost 72,000 Fios TV subs in Q4, widened from a loss of 51,000 a year earlier, ending the period with 3.85 million.
Fios Internet added 92,000 subs in Q4 2020, up from additions of 35,000 subs in the year-ago quarter, extending that total to 6.20 million. It marked the best Q4 for Fios Internet since 2014, the company said.
With DSL losses factored in, Verizon netted 66,000 broadband subscriber adds in Q4 2020, ending the year with 6.64 million.
Fios digital voice, meanwhile, shed another 58,000 subs, ending 2020 with 3.62 million.
Overall Fios digital connections dropped 2.3%, to 13.36 million. Fios revenues declined 2.5%, to $2.75 billion, partly attributed to customer credits for regional sports networks.
Other nuggets from Verizon's Q4 results and call:
Verizon Media Q4 revenues jumped 11.4%, to $2.3 billion, driven by advertising increases. Q4 also marked the first quarter of year-over-year growth in the unit since Verizon acquired Yahoo in 2017. Vestberg sidestepped a question about whether the recent sale of HuffPost to BuzzFeed marked the start of a dismantling of the Verizon Media business or if the business itself is on the block. "We're now in position where I wanted it to be," Vestberg said of the unit.
More than two-thirds of customers coming off of the 12-month Disney+ promotion with Verizon have maintained their subscription either through a direct billing relationship with Verizon or by opting into one of Verizon's Mix & Match plans that bundle in Disney+.
Verizon expects to add more than 20 5G Home markets in 2021, building on the dozen deployed now. Analysts at Sanford C. Bernstein & Co. expect 5G Home, viewed as a "strong niche business," to pass nearly 2 million homes by the end of 2021.
Verizon business revenues dropped 0.3%, to $8.1 billion in Q4 2020, and were down 1.5%, to $31 billion, for all of 2020. However, business wireless services climbed 7.1%, to $3.1 billion, in Q4.
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— Jeff Baumgartner, Senior Editor, Light Reading
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