Although its glory days of rapid expansion seem well behind it, Fios is still driving consumer markets revenue growth for Verizon.
Verizon Communications Inc. (NYSE: VZ) reported Thursday morning that its fiber-fed Fios unit boosted revenue to nearly $2.9 billion in the first quarter, up 4.7% from the same quarter a year ago. As a result, the company's wireline consumer market revenue inched up to $3.2 billion in the winter quarter, up a scant 0.7% over the year-earlier period.
The revenue increases came despite video subscriber losses in the first quarter, as, like other major US pay-TV providers, Verizon continued to battle against OTT video rivals and consumer cord-cutting. The telco shed 13,000 Fios Video customers, lowering its total to about 4.68 million. Over the past year, Fios has basically tread water on the video front, adding 3,000 subscribers as its video penetration rate has dipped from 35% to 33.8% because it's marketing the service to 460,000 more homes.
Verizon fared better on the broadband front, with its Fios Internet service picking up 35,000 subscribers to boost its customer base to nearly 5.69 million. Over the last 12 months, Fios has added 180,000 more broadband subs but its penetration rate has stayed even at 40.3%.
Even with these Fios Internet sub gains, Verizon still shed 27,000 broadband subscribers overall in the first quarter because of its continuing DSL sub losses. The provider now has just over 7 million broadband customers, down 86,000 from a year ago.
Verizon also didn't fare well on the digital voice front, losing 8,000 Fios Voice subscribers in the winter quarter. It ended March with 3.99 million Fios Voice subs, down 30,000 from a year ago.
On the company's earnings call this morning, Verizon ECP and CFO Matt Ellis reiterated the telco's strong commitment to building and acquitting more fiber for its wireline network in the wake of its big deal with Corning earlier this week. But he did not discuss any plans to extend Fios' reach beyond its current footprint of about 14.1 million households. (See Corning Lands $1B Deal With Verizon.)
— Alan Breznick, Cable/Video Practice Leader, Light Reading