Verizon’s FiOS numbers look pretty good for the 4th quarter 2008. Despite terrible economic conditions, Verizon managed to improve penetration for both its FiOS video and Internet offerings, now standing at 21% and 25% of homes passed respectively. In fact FiOS had its best quarter of net adds to date. Traditional wireline losses continued, including a net loss of 68K DSL subscribers and 460K residential wireline voice lines. In somewhat of a surprise, wireless growth actually slowed in the quarter, with 1.2 million net adds, as compared with 2 million net adds in the previous quarter. Even with the slowdown, thanks to higher wireless ARPU, wireless revenues still increased by 12% and wireless continues to be Verizon’s most profitable business unit. Wireless’ $12.8 billion in revenue represents slightly more than half of Verizon’s total revenue of $24.6 billion for the quarter. Other highlights of the quarter include:
- 72.1 million total wireless customers; 70.0 million retail customers, up 9.9 percent, not including customers added with the Jan. 9, 2009, acquisition of Alltel
- Wireless data revenues of $10.7 billion for the full year were up 44 percent over 2007. In the fourth quarter, data revenues were 26.8 percent of all service revenues, up from 21.3 percent in the fourth quarter 2007
- More than 65 percent of the company’s wireless retail customers – 45.5 million – had 3G broadband-capable devices by year-end
- 303,000 net new FiOS TV customers and 282,000 net new FiOS Internet customers, the highest ever for the company
- Growing revenue from broadband and video services drove consumer ARPU in legacy Verizon wireline markets (which excludes consumer markets served by the former MCI) to $68.46 for the fourth quarter 2008, a 14.3 percent increase compared with the fourth quarter 2007
- 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
The results are somewhat counter to conventional wisdom. The bad economy is supposed to drive more people to wireless and less people to premium Internet and video services. Verizon’s fourth quarter was the only quarter in 2008 where wireless growth actually slowed, rather than accelerate. The quarter also represents Verizon’s best quarter to date for new FiOS video and Internet adds. So much for conventional wisdom.
