Verizon reports that it added 202,000 net new subscribers to its FiOS TV digital competitor to local cable systems in Q3, bringing the total to 717,000. Verizon continues to concentrate on the TV fiber-optic build-out, but it is expensive. As the company deploys "fiber to the home" in neighborhood, it is paying over 800 bucks per home to hook up the new service – and that doesn’t include marketing to get those subscribers in the first place.
To look at Verizon’s quarterly earnings report, you might almost forget that it is still primarily a wired telephone company. All of the "highlights" deal with the wireless telephone business and the new "wired" businesses of FiOS, both video and broadband Internet. Those services are rapidly adding subscribers, while the twisted copper pair wired telephone business continues to lose customers. The business mix is changing and Verizon is trying to stay ahead of the curve by investing where there is growth.
For Q3, total revenues rose 5.8% to 23.8 billion, while operating income jumped 19% to 4.2 billion. Earnings per share were 44 cents, vs. 53 cents a year ago, before discontinued operations.
TVBR/RBR observation: FiOS is fast approaching the one million subscriber level, which isn’t much compared to the big cable MSOs, but Verizon is clearly committed to spending big to become a player in video and broadband. Its willingness to sign upfront deals for cash retransmission payments has also endeared it to broadcasters – and helped put pressure on the MSOs to do likewise. TVBR’s Bradenton, FL bureau has lately been watching the FiOS build-out up close and personal. Crews have been all over the neighborhood for months now, putting conduit in the ground and then running fiber through the conduit. Now we see tents along the street with work tables inside where technicians sit for hours on end wiring together the fiber connectors. And, yes, we’ve gotten quite a few mailings – not just from FiOS, but from the local cable company defending its turf. We’ve even gotten a personal visit from the cable company – just asking if we are satisfied with our service and if there is anything else they could do for us. Too bad we didn’t think to ask if they would weed the flower bed.
