Verizon Reports Largest FiOS Additions To Date - DSL losses compensated by strong FiOS quarter...
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Verizon Reports Largest FiOS Additions To Date
DSL losses compensated by strong FiOS quarter...
(old news - 08:34AM Tuesday Jan 27 2009)
tags: dsl · prices · Fiber · competition · coverage · business · telco · bundles · Verizon FIOS · Verizon Online DSL
Tipped by MrSpock29
Verizon lost 96,000 DSL customers last quarter for a number of reasons, not least of which are the recession, housing bubble and tight household budgets. Not helping much was the fact that Verizon had been diverting a lot of DSL marketing and support resources for promoting FiOS. Also not helping is the fact that Verizon's fastest speed in many markets remains just 3Mbps, and customers in these areas have been defecting to cable. While Verizon's FiOS and wireless businesses are doing well, their DSL business has been hit hard.

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To counter this, Verizon has started pushing DSL a little harder. Last October, Verizon upgraded their entry-level DSL tier to 1 Mbps downstream and 384 kbps upstream -- up from 768 Kbps/128 Kbps. The telco also revamped their bundles slightly for the 1Mbps, 3Mbps and 7Mbps tiers, reducing double and triple play pricing anywhere from $5 to $30, depending on what services and speeds users chose.

Earlier this month, Verizon again started offering DSL pricing for life -- a concept they offered for a while back in 2007. According Verizon, (see press release), new Verizon customers who sign a two year contract keep their pricing for as long as they keep the service. Obviously the usefulness of this promotion is limited if DSL prices drop, or if you're able to get better deal by renegotiating one year deals (which is often the case) or switching carriers.

So are the new promotions helping Verizon's DSL numbers? Not so much. But it may not matter. The company released their fourth quarter earnings today which indicate the company lost 68,000 DSL customers. However, Verizon's investment in FTTH is more than offsetting those losses -- the telco adding 282,000 new FiOS customers and/or 303,000 FiOSTV customers, giving Verizon a total of 8.9 million broadband customers. The FiOS numbers are surging because of Verizon's recent ability to more efficiently deploy FiOS to apartment buildings.

Of course things are looking even brighter for Verizon once you include their wireless division, now buoyed by the addition of Alltel subscribers. Not including Alltel users, Verizon added 1.4 million wireless subscribers on the quarter.

Related:
  1. We Talk To Verizon About Forced DSL to FiOS Upgrades
  2. Is Verizon Considering Metered Billing?
  3. Verizon Continues Proud History Of Denial
  4. Verizon Announces New FiOS Tiers, Promotions
  5. Verizon: LTE iPhone 'Apple's Decision'
  6. Verizon: Cut Your Landline To Save Money
  7. Verizon Hopes To Slow DSL Losses With NFL Sunday Ticket
  8. What Network Neutrality Is REALLY About
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TKJunkMail @ 27th Jan 08:56AM:
Verizon weathering recession very well despite DSL losses

Verizon weathering recession very well despite DSL losses. Given that most companies are reporting seriously reduced earnings and profits, these numbers are outstanding. I guess people don't reduce communication use despite all their complaints about their cell phone costs and internet costs.

YEAR-END 2008 HIGHLIGHTS

* $2.26 in 2008 diluted EPS from continuing operations and $2.54 in adjusted EPS, compared with 2007 earnings of $1.90 per share and $2.36 per share, respectively.
* $97.4 billion in 2008 revenues, up 4.2 percent, or adjusted growth of 5.1 percent.
* $26.6 billion in cash flows from operating activities; $17.2 billion in capital expenditures.
See all their financials here:
»newscenter.verizon.com/press-rel···8web.xls

Their full year 2008 net income is up over 16% from their 2007 numbers. What recession?? :D
And they started 2008 with $1.2 billion in cash on hand and ended it with $9.8 billion in cash on hand. I hope they don't expect any stimulus money form Uncle Sam.

They did show one negative stat in their Wall St presentation. The churn rate on wireless customers was up as the year progressed. So while they are getting new customers they are starting to see more wireless customers look elsewhere:
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BF69 @ 27th Jan 08:57AM:
How many are now FiOS customers?

If someone drops their Verizon DSL for FiOS I don't call that a "lost" customer. Me thinks Verizon needs new bean counters.
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jfpatrick @ 27th Jan 09:03AM:
Pushing FIOS

I have DSL, have had it for several years, and it's reliable. Verizon has been pestering me for the past few months to migrate to FIOS, as "DSL is not a long term solution." Told them for the price/speed difference, 7mb DSL is fine...
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lcjawhit @ 27th Jan 09:22AM:
DSL numbers

Another site shows DSL adds of 68K? I think they added customers.
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TKJunkMail @ 27th Jan 09:25AM:
Re: DSL numbers

said by lcjawhit :

Another site shows DSL adds of 68K? I think they added customers.
This right from the Verizon press release:
»newscenter.verizon.com/press-rel···ned.html
Total broadband connections were 8.7 million, a net increase of 214,000 over the third quarter 2008. This includes a decrease of 68,000 DSL-based Verizon High Speed Internet connections, which was more than offset by the increase in FiOS Internet customers. The 8.7 million is an increase of 8.2 percent year over year.
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birdfeedr @ 27th Jan 09:37AM:
40% of their footprint

From the link to their 4th quarter earnings report:

quote:
By the end of 2008, Verizon's FiOS fiber-to-the-premises network passed 12.7 million premises throughout the company's wireline service territory -- greater than the company's target of 12 million by year-end 2008. Fiber-to-the-home now passes approximately 40 percent of the total households in Verizon's landline footprint.

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Matt @ 27th Jan 10:13AM:
Re: Verizon weathering recession very well despite DSL losses

said by TKJunkMail :

So while they are getting new customers they are starting to see more wireless customers look elsewhere:
EDIT: Oops, that's VERIZON, not Verizon WIRELESS. :D
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tmc8080 @ 27th Jan 10:19AM:
Re: 40% of their footprint

said by birdfeedr :

From the link to their 4th quarter earnings report:

quote:
By the end of 2008, Verizon's FiOS fiber-to-the-premises network passed 12.7 million premises throughout the company's wireline service territory -- greater than the company's target of 12 million by year-end 2008. Fiber-to-the-home now passes approximately 40 percent of the total households in Verizon's landline footprint.

This took about 5 years and almost 20 billion dollars, so that means total network overlay should be competed in another 8-10 years and be another 20-25 billion because Verizon left much of the hardest to upgrade lines for last. Though, I'm happy that more and more Comcast subscribers who have Verizon in their backyard laugh at their 250gb data cap and throttled docsis 3 modem offerings.
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TKJunkMail @ 27th Jan 10:27AM:
Re: Verizon weathering recession very well despite DSL losses

said by Matt :

said by TKJunkMail :

So while they are getting new customers they are starting to see more wireless customers look elsewhere:
EDIT: Oops, that's VERIZON, not Verizon WIRELESS. :D
The churn is Verizon Wireless as I said & NOT Verizon. Here is the FULL slide. Notice the Wireless at the top.

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karpodiem @ 27th Jan 10:29AM:
Awesome

Glad to hear Fios is doing well. Now if only they would bring it to areas outside of Verizon's footprint...

Wishful thinking, but these results fortunately demonstrate the Fios is a viable business model. Let's hope it holds up.
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anon @ 27th Jan 10:35AM:
Cable: "I'm too sexy..."

"...Verizon's fastest speed in many markets remains just 3Mbps, and customers in these areas have been defecting to cable."

I'd rather have Verizon's 3000/768 DSL which hits those speeds any time of day on any day of the week than have cable which ranges from fast in the morning to way too slow in the evening, especially at half the price. I guess "3 meg down" just doesn't sound sexy enough for some people. :D
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Matt @ 27th Jan 10:38AM:
Re: Verizon weathering recession very well despite DSL losses

said by TKJunkMail :

said by Matt :

said by TKJunkMail :

So while they are getting new customers they are starting to see more wireless customers look elsewhere:
EDIT: Oops, that's VERIZON, not Verizon WIRELESS. :D
The churn is Verizon Wireless as I said & NOT Verizon. Here is the FULL slide. Notice the Wireless at the top.

[att=1]
$5 if you point out to me in your post where you said Verizon Wireless.
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JPL @ 27th Jan 10:53AM:
Re: 40% of their footprint

said by tmc8080 :

said by birdfeedr :

From the link to their 4th quarter earnings report:

quote:
By the end of 2008, Verizon's FiOS fiber-to-the-premises network passed 12.7 million premises throughout the company's wireline service territory -- greater than the company's target of 12 million by year-end 2008. Fiber-to-the-home now passes approximately 40 percent of the total households in Verizon's landline footprint.


This took about 5 years and almost 20 billion dollars, so that means total network overlay should be competed in another 8-10 years and be another 20-25 billion because Verizon left much of the hardest to upgrade lines for last. Though, I'm happy that more and more Comcast subscribers who have Verizon in their backyard laugh at their 250gb data cap and throttled docsis 3 modem offerings.
I'm sorry but this just doesn't make sense. Why would you think that the last miles of fiber are any more difficult than the first miles? Verizon is still working on franchise agreements - the one they just got authorized in Philly will allow them to finally move into the city. Doesn't mean that Philly is any 'harder' to roll into than the surrounding suburbs.

Also, you can't just do a straight computation of cost like that. Production costs drop over time. The cost of fiber has dropped considerably over the last couple years. Implementation processes improve over time too - they're alot more proficient at installing service today than they were 2 - 3 years ago. Ditto for finding/rectifying problems, which will also help drive down cost.

Finally, much of the money already spent is on infrastructure type stuff - VHOs and COs and the like. Expanding through existing areas is MUCH cheaper than starting up a brand-new area. Much of the costs for projects like this are front-loaded. Growth over time becomes cheaper. And as their footprint grows, Verizon's bargaining power with TV channel providers will grow as well, giving them better leverage to negotiate better rates for things like TV channels, also driving down price. High tech product costs drop very quickly overall. That HD TV that I bought 20 months ago was $300 more expensive than the equivalent current model today.
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TKJunkMail @ 27th Jan 10:56AM:
Re: Verizon weathering recession very well despite DSL losses

said by Matt :

$5 if you point out to me in your post where you said Verizon Wireless.
quote:
The churn rate on wireless customers was up as the year progressed. So while they are getting new customers they are starting to see more wireless customers look elsewhere:

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Matt @ 27th Jan 11:02AM:
Re: Verizon weathering recession very well despite DSL losses

said by TKJunkMail :

said by Matt :

$5 if you point out to me in your post where you said Verizon Wireless.
quote:
The churn rate on wireless customers was up as the year progressed. So while they are getting new customers they are starting to see more wireless customers look elsewhere:


Eh, you still didn't say Verizon Wireless, but I did miss the wireless in your last paragraph. I call it a draw. :)

I must have caught it subconsciously though, my pre-edited response was about how I switched from Verizon to save money.
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Smith6612 @ 27th Jan 11:18AM:
Re: Cable: "I'm too sexy..."

I for sure will not be dropping my DSL line. I'm only running the 1Mbps/384kbps speed, and sure while I can go to the 3Mbps plan, I'm too far for 5Mbps but I'm awaiting FiOS the moment it comes here. My DSL has been reliable. It never disconnects, and there has only been one time which lasted for a half a day where my service was seeing degraded speeds and high pings. It was a CO issue. Other than that, I'm a gamer which means I'm online utilizing the line almost all the time and it is great. Honestly, I'd rather shell up a few dollars extra for a slower speed BUT have reliability packaged into that, which is what the DSL has done and cable hasn't in my area.
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NOCMan @ 27th Jan 11:18AM:
Re: Verizon weathering recession very well despite DSL losses

29 approved open development devices.

Where are they?
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TKJunkMail @ 27th Jan 11:25AM:
Re: Verizon weathering recession very well despite DSL losses

said by NOCMan :

29 approved open development devices.

Where are they?
In this thread:

»Verizon's Open Development Initiative? So Far It's A Joke
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TKJunkMail @ 27th Jan 11:39AM:
Despite great results Vz stock drops on 2009 fears & pension hit

»finance.yahoo.com/news/Verizon-w···246.html
Verizon Communications Inc reported fewer-than-expected wireless subscribers for the fourth quarter and warned that pension and other post-retirement expenses would hurt earnings in 2009, dragging its shares down more than 5 percent.

Verizon said pension and other post-retirement expenses would hurt 2009 earnings by 9 cents to 11 cents per share, joining a growing number of companies being forced to fill funding gaps due to turmoil in financial markets.

Verizon shares were down 5.4 percent at $29.32 in morning New York Stock Exchange trading.
Even good news doesn't result in higher stock prices in this economy.
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Matt @ 27th Jan 11:46AM:
Re: Despite great results Vz stock drops on 2009 fears & pension

said by TKJunkMail :

Even good news doesn't result in higher stock prices in this economy.
I think everyone is trying to release their bad news in the wake of yesterday's. It's a smart move that will lessen the blow. After all, at least they didn't announce that 20,000 positions would be eliminated!
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Sammer @ 27th Jan 12:20PM:
Re: 40% of their footprint

said by tmc8080 :

This took about 5 years and almost 20 billion dollars, so that means total network overlay should be competed in another 8-10 years and be another 20-25 billion because Verizon left much of the hardest to upgrade lines for last. Though, I'm happy that more and more Comcast subscribers who have Verizon in their backyard laugh at their 250gb data cap and throttled docsis 3 modem offerings.
Assuming that Verizon doesn't sell off about 20-25% of their landline footprint.
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anon @ 27th Jan 12:33PM:
Blackberry Storm

Did Verizon talk about how the Blackberry Storm did? I'm interested in seeing those numbers and how it "measures" up with the iPhone. I see their churn went up a bit, most likely due to the iPhone 3G as well as the slow economy.
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batterup @ 27th Jan 04:15PM:
Ma knows best.

Verizon is part of what is left of Ma Bell. at&t, Quest and Verizon are TPC and are not begging for a government hand out, firing people or capping usage.

What would be the state of the network if TPC were still providing universal service at an affordable price?
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batterup @ 27th Jan 04:32PM:
Re: Ma knows best.

VZ 29.96 -1.03 -3.32% in the past year my VZ stock lost 23%. I gladly give up my house and food so the masses can have cheep porn.
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perki @ 27th Jan 10:53PM:
HEY VERIZON

Verizon Bring FIOS TO SANTA MARIA CALIFORNIA 90,000 and GROWING!!! I"L SIGN A 50 YEAR CONTRACT AND GIVE YOU MY FIRST BORN!!! :D
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EPS @ 28th Jan 12:17AM:
Re: 40% of their footprint

Ah, well, that was the initial plan, but they've said since then that the NH/VT/ME sell-off was much more trouble than they'd expected, so the sell-offs are paused- still, I would expect more in the future, once the economy recovers to the point where you have investors popping up with more money than sense to buy the networks.
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vinnie97 @ 28th Jan 03:04AM:
Re: HEY VERIZON

Firstborns are expensive. ;)
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peltec @ 28th Jan 07:28AM:
Re: Ma knows best.

Please don't blame my mastubatory habits for your bad financial planning. When the next financial crash happens I want somebody in Super Hi-Def Youtube to plead me to get the F@#* out of the market 1 year before it crashes!

Then again, if people would stop whacking off to Hi-Def PR0N and pay attention to politics, they might avoid getting screwed altogether.

It works both ways.
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anon @ 28th Jan 12:03PM:
Verizon Footprint

Soon FIOS will cover 100% of their footprint,

As soon as they sell off states they dont value any more.........
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ITALIAN926 @ 28th Jan 02:48PM:
Re: Verizon weathering recession very well despite DSL losses

Wheres Craig Moffet.. ?
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