Verizon Snags Another 92K Fios Broadband subs in Q2

Broadband sub increase drives up Fios revenues by over 5 percent.

  • Verizon

 

Verizon’s Fios business continued to flourish in the second quarter as its broadband subscriber base rose again. During the quarter, Verizon added 92,000 Consumer Fios Internet customers.

Total Fios revenues were up 5.4 percent year-over-year, driven by continued broadband subscriber growth. It ended the quarter with a total of 6.4 million Fios subscribers. However, video losses continued to mount. The consumer segment reported 62,000 Fios Video net losses in second-quarter 2021 to end with a total of 3.7 million subscribers.

Consumer Fios revenues of $2.9 billion in second-quarter 2021 were the highest since the company's new operating structure was introduced in 2019.

Matt Ellis, CFO of Verizon, told investors during its second-quarter earnings call that “the company’s trailing 12-month total Fios Internet net addition performance is the highest since 2015.”

Broadband Demand Remains Strong

What was revealing about Verizon’s Fios growth was that broadband demand continues to rise. Such a scenario is not surprising given that there’s still a large percentage of people working from home.

Broadband usage has risen as more workers have to access bandwidth-intensive applications like Zoom video calls.  

Although the trend varies by industry, a recent benefits consulting firm Willis Towers Watson report revealed that employers expect nearly 2 in 5 employees will still be working remotely at the end of 2021, compared with 57 percent who work remotely now.

Ellis said that having a robust internet connection and flexible pricing is driving more of its customers to purchase broadband services like Fios.

“The quality and reliability of our Fios service, combined with the simplicity of our Mix and Match offerings, continues to drive strong demand for broadband,” Ellis said.

He added that Fios growth is “supported by strong customer retention and our Fios Internet customer base is more than 7 percent higher than a year ago.”

Gigabit Uptake Rising

Within the Fios broadband arena, Verizon is seeing more of its customers migrate to its 1 Gbps speed package.

“Momentum in Fios continues with revenues of $2.9 billion, surpassing pre-COVID levels, driven by the continued uptake of gigabit speeds,” Ellis said. “The results represent our highest revenue results ever.”

Customers that purchase the $84.99 1 Gbps package are equipped with a whole-home Wi-Fi router and one Wi-Fi extender if a customer requests it. The company sells additional extenders that are available to rent for $10/mo. or buy for $199.

Fios also helped drive up Verizon’s Consumer total second-quarter consumer revenue 11.2 percent to $24 billion.

“We remain encouraged by the continued margin improvement within Fios, driven by the adoption of Mix and Match plans and a greater contribution from broadband,” Ellis said. “Consumer segment EBITDA for the quarter grew 4.9 percent over 2020, representing an EBITDA margin of 44.3 percent, down from the prior year, primarily resulting from higher activations.”

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