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Cable/Video

Verizon Fios, media units hit COVID-19 headwinds

In another sign that the COVID-19 pandemic is wreaking havoc with the financial results of service providers, Verizon reported lower numbers for both its Fios and Verizon Media units for the second quarter.

Verizon said it shed 81,000 Fios video customers in the spring quarter, widened from a loss of 52,000 subs in the year-ago quarter. As a result, the company ended June with about 3.99 million subs as the pay-TV cord-cutting trend continues at a torrid pace.

At the same time, Verizon added just 10,000 Fios Internet customers in Q2, down from a gain of 28,000 in the year-ago period, as it scaled back on both service promotions and equipment installations. The telco closed out the period with 5.97 million Fios Internet customers.

Factoring in DSL and other technologies included, Verizon lost 13,000 total broadband connections in the quarter, a deterioration from the 2,000 broadband subs it dropped a year ago. Verizon ended the period with a total of 6.47 million broadband connections.

As in previous quarters, Verizon fared even worse with its Fios digital voice service, shedding 70,000 connections in the quarter, more than double the 32,000 voice connections it lost the year before. Verizon ended Q2 with 3.46 million total Fios digital connections, down from the 3.73 million it had in the year-ago period.

Fios revenues came in at $2.75 billion for the quarter, slightly down from $2.77 billion a year earlier. Overall, Fios revenues have now dropped for the past two quarters after years of steady growth.

Seeking to keep Fios installations going despite pandemic-imposed restrictions on service technicians entering customer homes, Verizon introduced it" "Fios In a B"x" initiative in April to enable subscribers to carry out equipment self-installs. As part of that program, Verizon delivers the optical network terminal (ONT), set-top box, router, a power strip and required coax and Ethernet cables to the home, along with "crushable fiber" that can be fed through a window opening. Company technicians stay nearby to guide customers through the process and help with any installation hiccups using an app.

Speaking Verizon's earnings call Friday morning, Verizon EVP & CFO Matt Ellis said company technicians resumed doing in-home installations in June. But the Fios In a Box program, which has proved popular, goes on as well.

Like AT&T's WarnerMedia unit, Verizon Media Group's business, which includes Yahoo, took the biggest beating from COVID-19. The media unit's revenues plunged 24.5% to $1.4 billion in the quarter as search and ad revenues both sank. But, looking for a silver lining, the company pointed to "increased customer engagement" on its media properties during the spring.

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

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