Verizon released their 2008 first quarter earnings this week. Among the details, the report demonstrates that wireless and FiOS are driving growth, and traditional wireline is not. No huge revelations there. AT&T reported similar results, highlighting wireless and broadband as growth engines. Verizon is seeing decent results with FiOS (although probably not quickly enough for some investors), and the FTTH detractors noise is certainly less deafening. Key results include a $129/month ARPU rate for FiOS customers (more on that below), and:
- $23.8 billion in revenues, up 5.5%; $4.3 billion in operating income, up 14.1%
- 1.5 million net wireless customer additions; 67.2 million total customers; 65.2 million retail customers, up 11.5%
- 1.19% total wireless churn and 0.93% retail post-paid churn
- 13.2% increase in total wireless revenues; wireless data revenues up 48.9%
- 263,000 net new FiOS TV customers and 262,000 net new FiOS Internet customers, for a total of 1.2 million FiOS TV customers and 1.8 million FiOS Internet customers; 8.5 million total broadband customers, up 14.9%
- More than $1 billion in consumer and small-business broadband and video revenues
- 9.6% increase in consumer ARPU in legacy telecom markets
Early indications are that the FTTH strategy with FiOS is working. For example, FiOS customer ARPU was $129/month, compared with $61/month for legacy wireline customers. That metric indicates that FiOS customers are subscribing to more services, due in large part to FiOS’ ability to deliver more robust revenue generating services. Probably more importantly, Comcast reports on its last available quarterly report that total ARPU for their subscribers was $104/month. That difference in ARPU is one reason why some are suggesting that it’s just a matter of time before cable operators are compelled to go FTTH as well. Light Reading offers some insight into that debate, where some analysts argue that FTTH makes operational and competitive sense for cable companies. There is mounting evidence to support that with Verizon’s latest quarterly data.
On a side note, Verizon and New York city have agreed to terms for a citywide cable franchise agreement. Looks like they’ll be providing some headaches to Cablevision and Time Warner Cable. To be fair, Cablevision has stood up to Verizon’s competitive challenge in other territories, and has proven they are more than able to meet the challenge.
