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Verizon prospers; FiOS picks up steam

Mon, 04/30/2007 - 11:30am
Brian Santo, CED

Paced by growth in nearly all facets of its business, including broadband data, pay TV, business services, and wireless phone, Verizon reported higher revenue in its 2007 first quarter. The improvement in income was tempered by several one-time charges that led to lower profits.

Verizon added 416,000 net new broadband connectins. Of the quarterly adds, 177,000 were FiOS subscribers.

Verizon how has a smidge under 7.4 million broadband subscribers total, of which 864,000 are FiOS. The total of all broadband subscribers is up 30 percent from the end of Q1 2006.

FiOS TV, constrained somewhat by Verizon’s obligation to apply for video franchise rights, is growing more slowly than FiOS broadband. The company added 141,000 FiOS TV subscribers in Q1, for a total of 348,000.

Nonetheless, Verizon reported the average number of daily installs is now up to 2,200 a week; the Q4 daily average was 1,450. Verizon also has a total of 618,000 customers subscribing to TV from partner DirecTV.

Business services, largely IP-based data services, grew enough to offset losses in business telephony. Data revenues across all market segments increased 12.2 percent, to $4.2 billion, compared with the first quarter 2006, Verizon reported.

Verizon Wireless reported nearly 1.6 million retail net customer additions, for a total of 58.5 million retail customers. That number goes up to 60.7 million when the company adds in wholesale customers too.

Verizon continues to lose wireline connections – another 3 million in Q1. Revenue in mainline telephony was down.

Capex spending was $2.4 billion on wireline, a consistent figure as Verizon steadily rolls out FiOS. Spending on wireless was up to $1.7 billion, an increase largely attributable to Verizon upgrading its network to EV-DO Rev A.

Verizon revenue was up 6.5 percent year over year to $22.5 billion, while net income was down 7 percent to $1.5 billion. The biggest hit to the company’s bottom line was from losses associated with Venezuela nationalizing its telecom industry.

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