Maybe Verizon Fixed Network Trend is the Bigger Take-Away in 2Q

By Gary Kim July 22, 2014

Take rates for higher-speed Internet access services, and net tablet and video entertainment connections, were a few of the operational trends that stand out in Verizon’s second quarter results.

But the biggest single take-away might be adoption of higher-speed Internet access on the fixed network, even if it is mobile that continues to drive Verizon’s net new account growth. 

Verizon added 1.4 million net new mobile connections in its second quarter of 2014, of which 304,000 were postpaid phone net additions. The bulk--1.15 million new connections--were for  postpaid tablet service.

That necessarily shifts Verizon revenue growth efforts away from "adding more mobile phone customers" to increasing revenue from the customers it does have; some would argue Verizon is doing just that.

Verizon is monetizing mobile data plans better than its rivals, according to a new report from Consumer Intelligence Research Partners (CIRP).

In large part, that might be because Verizon has fewer customers on “unlimited” plans, allowing it to match usage and revenue more directly.

About 22 percent of Verizon customers are on unlimited use accounts. AT&T might have 44 percent of customers on such plans.

By design, 78 percent of Sprint and T-Mobile US customers are on “unlimited usage” plans.

But even if mobile services now drive growth at Verizon, in the fixed network segment, both high speed access and video now are lead Verizon products.

Verizon added 139,000 net new FiOS Internet connections and 100,000 net new FiOS Video connections.

Year over year, FiOS Internet subscriber accounts grew nine percent, while FiOS video customers expanded nearly eight percent.

Verizon had totals of 6.3 million FiOS Internet and 5.4 million FiOS Video connections at the end of the second quarter.

FiOS Internet penetration (subscribers as a percentage of potential subscribers) was 40 percent at the end of second-quarter 2014, compared with 39 percent at the end of second-quarter 2013.

But the notable trend might be consumer preferences. By the end of second-quarter 2014, 55 percent of consumer FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 Mbps to  500 Mbps, up from 51 percent at the end of first-quarter 2014.

Total Verizon high speed access connections totaled 9.1 million at the end of second-quarter 2014, a 1.5 percent year-over-year increase.

Net broadband connections increased by 46,000 in the second quarter of 2014, as FiOS Internet net additions offset declines in digital subscriber line services.

FiOS video penetration was 35.3 percent, up just slightly over 34.5 percent penetration in the same quarter of 2013. The FiOS network passed 19.3 million premises by the end of second quarter.




Edited by Adam Brandt

Contributing Editor

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