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FiOS, Wireless Help Verizon's Healthy Q1

Ray Le Maistre
4/30/2007

Verizon Communications Inc. (NYSE: VZ) delivered strong first-quarter results this morning, reporting a 6.4 percent rise in revenues to $22.6 billion, a net income of $1.5 billion, and earnings per share of $0.51. (See Verizon Reports Q1.)

It also delivered encouraging subscriber growth numbers in its key fixed-broadband and wireless businesses, and stronger revenue growth from its Verizon Enterprise Solutions division, which sells to corporate customers.

Verizon now has 7.4 million fixed high-speed access customers, up 30 percent from a year ago. It added 416,000 new broadband customers in the first quarter, including 177,000 new FiOS customers, taking its total retail fiber access customer base to 864,000. (See FiOS Tracker and Could FiOS Trump Docsis 3.0?)

The FiOS FTTH network now passes 6.8 million homes, with Verizon planning to pass 9 million by the end of this year.

The carrier also boosted its FiOS TV customer base by 141,000 in the three months to March 31, taking its video-over-broadband customer base to 348,000. It says it added, on average, 2,200 FiOS TV connections each business day in the first quarter, up from about 1,450 in the fourth quarter of 2006. (See Verizon FiOS Adds HD.)

But as Verizon's broadband base grows, so its traditional voice line subscriber base continues to decline. It now has 44.2 million traditional access lines, down nearly 8 percent year-on-year.

There's still plenty of demand for mobile connections though. CDMA operator Verizon Wireless added 1.6 million retail subscribers, nearly all of them post-paid customers, to take its total retail base to 58.5 million.

Including wholesale wireless connections, its total mobile subscriber base is now 60.7 million, up 14.5 percent from 2006. Total wireless revenues were $10.3 billion, up 17 percent year-on-year.

Verizon Wireless also noted an 80 percent increase in data service revenues to $1.6 billion, with 36 million of its retail mobile customers now spending money on data services, an increase of more than 37 percent from a year ago.

The carrier is also making progress with its business services division, Verizon Business, which includes the former MCI. Its revenues grew 2.3 percent to $5.2 billion in the first quarter, with the carrier citing strong demand for its "key strategic services," including IP and managed services. These services accounted for revenues of $1.2 billion, up nearly 23 percent from a year ago. (See Verizon Serves E-VPLS, Verizon Hits Milestones, and Verizon Offers Managed VOIP.)

Verizon's share price crept up by $0.46, more than 1 percent, to $38.35 in pre-market trading this morning as investors listened in on the carrier's conference call.

— Ray Le Maistre, International News Editor, Light Reading

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