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Verizon Fios revenues hit new high even as pay-TV subs shrink

Verizon's Fios business continued its refrain in the second quarter of 2021, as continued strength in broadband was partially offset by another pay-TV subscriber loss.

With everything rolled up, Verizon's Fios business raked in revenues of $2.89 billion in Q2, up 5.4% from the year-ago quarter. The revenue gain was partially driven by continued uptake of 1-Gig speeds, and the quarterly revenue total was the highest-ever for Verizon's Fios business, Matt Ellis, Verizon's CFO, said on today's earnings call.

"Verizon's Fios service continues to show strength, a product of both more aggressive pricing and a lessening drag from video as the video base shrinks," Craig Moffett, analyst with MoffettNathanson, explained in a research note issued after Verizon's Q2 results. "Solid demand for higher speed broadband connections, even post-COVID, continues to be seen all across the industry."

Margins for Fios are also improving thanks in part to continued adoption of Verizon's ever-evolving Mix & Match plans, which lead with broadband and present multiple pay-TV options – Verizon's own Fios TV service as well as streaming services from Dish Network-owned Sling TV and Google's YouTube TV.

Verizon lost 62,000 Fios video customers in Q2, lowering its grand total to 3.71 million. The good news beneath that is that Verizon's Q2 2021 video losses narrowed from a year-ago loss of 81,000. Verizon's Fios Internet business remained strong with a quarterly gain of 92,000, well surpassing a year-ago gain of just 10,000. With DSL losses included, Verizon added 70,000 broadband customers in the quarter, improving on a year-ago loss of 13,000, for a total of 6.78 million.

Verizon hopes to carry its Mix & Match momentum into the current quarter, announcing this week a string of upgrades tied to those packages that are set to take effect Thursday, July 22.

In addition to including a whole-home Wi-Fi system that features a router and extender to boost the in-home Wi-Fi signal for no added charge for new 1-Gig subs, Verizon is also making its Fios TV app available on Apple TV and Amazon Fire TV devices. While the app extends the access of the Fios TV service to those retail streaming devices, customers are still required to have at least one Verizon-supplied Fios TV One box. However, Verizon's new Fios TV plans come with the Fios TV One box (with voice remote) at no additional charge, the company said.

Verizon is also tossing in more perks for customers who take the Fios 1-Gig broadband service, the latest being a Samsung Chromebook 4 and 2 terabytes of Verizon Cloud storage.

C-band-capable router on tap

Verizon CEO Hans Vestberg issued a brief update on 5G Home, noting that the service, which delivers broadband over millimeter-wave spectrum, is now available in parts of 47 markets. He said Verizon plans to introduce a new home router that's compatible with the company's C-band spectrum in the second half of 2021.

Verizon has yet to break out how many customers are on the 5G Home service, but said it is on track with a plan to cover between 1 million to 2 million homes with millimeter wave by the end of 2021.

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— Jeff Baumgartner, Senior Editor, Light Reading

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