Verizon’s Q4 Fios Subs Jump by 92K

Verizon sees Fios internet subscribers rise as more customers work from home and conduct home schooling during the COVID-19 pandemic. 

  • Verizon

Verizon’s Fios FTTH service continues to benefit from the work from home surge caused by the COVID-19 pandemic, a trend that continued during the fourth quarter.

The service provider added 92,000 new net Fios internet customers, up from 35,000 net additions in the fourth-quarter 2019.

What’s more, Verizon added 95,000 total Fios subscribers across the Consumer and Business segment—the most fourth-quarter total Fios internet net additions since 2014.

“We continue to build on our strong third quarter with consumer Fios Internet net additions of 92,000, more than double the fourth quarter of 2019,” said Matt Ellis, CFO of Verizon, during the fourth-quarter earnings call. “Total Fios Internet net additions of 95,000 was the best fourth quarter we have had since 2014 and reflected strong demand for our gigabit offering as consumers continue to work and learn from home.”

Verizon currently passes 15,790 subscribers with Fios FTTH service today and has over 6.5 million subscribers.

Consumer operating revenues for the fourth quarter were $23.9 billion, down 1.2 percent.

Ellis said the decline in the Consumer segment “was primarily driven by a 3.8 percent decline in wireless equipment revenue due to softer volumes in the quarter” while for the “full year, total Consumer revenue decreased 2.8% to $88.5 billion driven by the decline in wireless equipment revenue.”

Focus on Video Flexibility, Fios Data Growth

While Fios internet services subscribers continue to rise, Verizon’s video segment continues to decline as more users turn to online video services.

Verizon’s Consumer segment reported 72,000 Fios Video net losses in fourth-quarter 2020, reflecting what Ellis said was “the ongoing shift from traditional linear video to over-the-top offerings.”

The telco said it has no immediate plans to shut down its Fios video service, but instead wants to give customers more flexibility in how they consume video services. Customers can choose three broadband speeds: 100 Mbps for $39.99, 300 Mbps for $59.99 or the Gigabit Connection for $79.99.

Under its Mix & Match plan for Fios, customers can choose the services they want, including broadband, TV and phone service. Customers have the option to choose five of their favorite channels and let Verizon pick an additional 100 channels based on their interests.

The service provider has also gotten ride extra expenses, such as video franchise fees, regional sports fees and other charges that are typically seen on a traditional cable bill. Those costs are calculated into the price of the service. Verizon will also eliminate annual contracts. 

“On the Fios side, of course, we will continue with the video right now,” said Hans Vestberg, CEO of Verizon. “But you’ve seen us also starting with Mix & Match, starting to shop up this because ultimately, I want our customers to have choices. And I want them to choose. If they want the D2C solution or if they want a linear or want over-the-top, they should be able to choose it.”

Raising Fiber Capital

Verizon is also keen on using its capital to fund more fiber deployments for its 5G wireless service and Fios throughout 2021 and beyond.

The company told investors that its consolidated capital spending for the full year 2021 is expected to be between $17.5 billion and $18.5 billion.

Ellis said this figure is “consistent with the prior year and within our normal capital intensity range.”

“Our focus for the year includes further expansion of our 5G Ultra-Wideband Network in new and existing markets, densification of our network to manage future traffic demands and continued deployment of our fiber infrastructure,” he said.

New Street Research said in its “There Is More Fiber Coming” that Verizon should continue to pass homes every year with fiber.

“We expect Verizon to continue to grow fiber homes passed by ~400K homes per year,” the research firm said.  

From an overall financial standpoint, Verizon reported total consolidated operating revenues in fourth-quarter 2020 were $34.7 billion, down 0.2 percent from fourth-quarter 2019.

Full-year 2020 consolidated operating revenues were $128.3 billion, down 2.7 percent year over year.

For 2021, Verizon expects service and other revenue growth of at least 2 percent, reflecting what Ellis says, “is an acceleration of total wireless service and Fios revenue growth as well as continued momentum in Verizon Media, partially offset by ongoing legacy wireline product declines.”

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