Video services

FiOS Turns the Screw on Cable

U.S. cable operators take note: Verizon Communications Inc. announced gains for its FiOS broadband and video services offerings as part of its strong first-quarter results. That's noteworthy because while the cable sector suffered attrition of its video customer base during 2012, Verizon's FiOS gains have come not only from building new fiber access infrastructure in more U.S. markets but also by gaining customers in existing markets: That means Verizon is continuing to increase penetration in neighborhoods where its fiber access network is already deployed. Verizon isn't the only company pressuring the cable operators: AT&T Inc. also grew its video customer base in 2012. (See Good News/Bad News for Cable TV.) Verizon's first-quarter numbers show steady gains: Internet service penetration jumped from 37.3 percent in the fourth quarter of 2012 to 38.2 percent in the first quarter of 2013, while video service penetration jumped from 33.3 percent to 34.1 percent. Verizon gained 188,000 FiOS broadband customers, taking its total to 5.6 million, and added 166,000 video service subscribers, taking that total to 4.9 million. (See Verizon Operating Revenue Up 4.2% in 1Q13.) Now that the operator's new fiber deployments have slowed -- see FTTH Quietly Grows 10% in North America -- Verizon has to rely on improving penetration rates to increase revenues and that new focus appears to be working. Not only have FiOS revenues grown 15.1 percent year over year, but Verizon says its average monthly revenue per user for FiOS stayed above $150 during the first quarter. AT&T and Time Warner Cable Inc. will both report their first-quarter earnings later this week, while Comcast Corp., Charter Communications Inc. and Cablevision Systems Corp. will follow in early May. — Mari Silbey, Special to Light Reading Cable

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