3:35 PM -- Verizon Communications Inc. (NYSE: VZ) released its 2Q09 numbers yesterday, and FiOS is performing quite well. They added 300,000 FiOS TV (2.5 million total) and 303,000 FiOS Internet (3.1 million) customers in the quarter. That’s a record for FiOS Internet. The penetration numbers look good as well: 25 percent for TV and 28 percent for Internet.
Compare these numbers to some cable metrics. An interesting comparison between cable and telco is how effective they are at taking away the other's core business. In other words, compare telephony penetration for cable and video penetration for telco. This is where FiOS shines. FiOS has 25 percent penetration for video, whereas when looking at cable penetration for telephone: 1) Comcast Corp. (Nasdaq: CMCSA, CMCSK) has 14 percent; 2) Time Warner Cable Inc. (NYSE: TWC) has 15 percent; and 3) Charter Communications Inc. has 13.5 percent (all as of 1Q09). The only cable company performing better at taking away core services is Cablevision Systems Corp. (NYSE: CVC), with a 41 percent penetration of telephone.
For broadband, FiOS and their cable competitors are relatively even. Verizon at 28 percent, Comcast at 30 percent, Time Warner Cable at 33 percent, and Charter at 26 percent. Once again, Cablevision leads all at 52 percent. But when you look at ARPU, FiOS really shines at $135. Comcast is at $115, Time Warner Cable at $111, and Charter at $110. Cablevision edges out FiOS slightly at $136.
With Verizon shedding much of its non-FiOS wireline assets, the operator intends to cover 70 percent of its footprint with FiOS sometime in late 2010/early 2011. If Verizon's able to match this performance across this entire footprint, cable may indeed be in trouble. Heck, maybe even AT&T is in trouble?
— Bernardin Arnason, Managing Partner, Pivot Group , and Chairman, TelcoTV 2009
Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.