Verizon broadband gains continue to outpace video losses
Verizon's residential Fios business provided more of the same in Q1 2021 as it continued to rake in broadband subs and shed pay-TV customers.
The carrier lost another 82,000 Fios TV subs for the period, a slight improvement from a year-ago loss of 84,000, lowering its total to 3.77 million.
Verizon Fios also tacked on 98,000 more Fios Internet connections in Q1, improving from a gain of 59,000 in the year-ago quarter, and extending that total to 6.3 million. With DSL losses included, Verizon added 66,000 total residential broadband connections, up from a gain of 31,000 a year earlier. Verizon ended the quarter with 6.71 million total broadband connections.
The carrier lost another 79,000 Fios digital voice connections, ending the quarter with 3.52 million.
Verizon ended Q1 2021 with 13.29 million total Fios digital connections, down 1.9% from 13.55 million in the year-ago quarter.
Help from 'Mix & Match' plans
Fios revenues rose 2.2%, to $2.86 billion in the period. Part of that gain was due to Fios Internet customers upgrading to higher-speed tiers. Verizon also credited the success of "Mix & Match" plans that lead with broadband service and give customers the option to add on YouTube TV or Verizon's own Fios TV service.
Verizon applied the Mix & Match concept to Fios in Q1 2021. The pandemic initially disrupted the program's benefit, but Mix & Match volumes have picked up in the last three quarters, Matt Ellis, Verizon's CFO, said on today's earnings call.
"It's been great for our consumer business," Ellis said of Mix & Match. "It's really [broadband subscription] volume as much as step-ups" in speed, he added.
Mum on 5G Home subs
Verizon continues to be bullish about 5G Home, its fixed wireless broadband service that's now available in parts of 35 cities. With C-band spectrum poised to complement the millimeter wave spectrum used for 5G Home today, Verizon intends to use fixed wireless not only for the residential market but for the business sector as well.
On the residential end, Verizon has been trying to make 5G Home more attractive with new promos and perks. The new round of incentives include an offer of up to $500 to cover early termination fees tied to a switch to 5G Home, as well as free Samsung Chromebook 4s and streaming devices, and bundling in a year of the new Discovery+ streaming service.
But it's hard to know how successful 5G Home has been in the early going, as Verizon has yet to reveal any subscribe numbers for the service. "As those expand, we'll start to disclose them," Ellis said.
Verizon doesn't break out 5G Home revenues, either. They are baked into Verizon's broad service revenue pool, which generated $16.56 billion in Q1, up 1.4%.
Business services was a bright spot among other segments, pulling in $7.78 billion, up 1.3% year-over-year. Verizon's small and midsized segment, a group that has been particularly vulnerable during the pandemic, saw revenues inch up 0.9%, to $2.55 billion.
Vestberg wasn't ready to say that the SMB sector was set to come back immediately. "But clearly, we see some signs of improvement in the base," he said.
Wary of broadband price regulation
Verizon remains relatively non-committal concerning recent rural broadband stimulus activity, including $100 billion in broadband spend tied into President Biden's proposed $2 trillion infrastructure plan.
"This is in the planning stages so it's hard to say if this will go through or not," Hans Vestberg, Verizon's CEO, said on the call. "On the other hand, I think that what we are telling the administration ... is that accessibility, affordably and usability are the three buckets to address the digital divide."
Vestberg stressed that Verizon is advocating for the private sector to continue investing in the network, "and then having the government work more with the affordability of it." However, the specter of broadband pricing regulation would be "counterproductive to the market," he added.
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— Jeff Baumgartner, Senior Editor, Light Reading