Verizon FiOS lifts wireline consumer revenues to $14 billion in 2012

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Verizon's (NYSE: VZ) fourth-quarter wireline results may have declined to $10 billion year-over-year, but it saw continued growth in consumer services, particularly FiOS.

Despite the impact of Hurricane Sandy, FiOS continued to dominate Verizon's consumer wireline revenue mix. During the quarter, it added 144,000 net new FiOS Internet connections and 134,000 net new FiOS Video connections.

Interestingly, Hurricane Sandy, as seen in previous reports, sped up the telco's copper-to-fiber migration plans. Lowell McAdam, Verizon's CEO and chairman said during a recent investor conference that it will accelerate the migration of customers on its copper facilities to fiber in 2013.

As reported in FierceIPTV, Fran Shammo, Verizon's CFO, said during the earnings webcast this morning that "net adds were greater than the second and third quarters… in spite of the significant disruption caused by the [Superstorm] Sandy restoral efforts.

The telco's Q4 wireline consumer revenues grew 4.1 percent year-over-year over Q4 2011. From a total year perspective, 2012 consumer revenues were $14 billion, up 3.2 percent compared over 2011.

It said this was highest annual revenue growth rate in the consumer wireline segment it has seen since 2003.

Here's a breakdown of Verizon's key wireline metrics:

Landline Losses: Following the wireline industrywide trend, Verizon's traditional landline voice connections overall declined 6.8 percent year-over-year to 22.5 million down from 24.1 million in Q4 2011.

Broadband and video: As of the end of the quarter, Verizon had a total of 5.4 million FiOS Internet and 4.7 million FiOS video connections, representing year-over-year increases of 12.6 percent and 13.3 percent, respectively. FiOS customer ARPU was more than $150 in the quarter. FiOS Internet penetration was 37.3 percent at the end of fourth-quarter 2012, compared with 35.5 percent at the end of fourth-quarter 2011.

As of the end of 2012, the FiOS network passed 17.6 million premises at year-end 2012. At the end of 2012, broadband connections rose 1.4 percent year-over-year to 8.8 million at year-end 2012. Purchases of higher speed FiOS services drove broadband revenue up 3.1 percent to $3.5 billion for full-year 2012.

Another dynamic of FiOS growth is that more customers are purchasing dual and triple play bundles of voice, video and data. Shammo said during the Q4 earnings call that "customers who are deciding to upgrade to additional FiOS services, we are seeing a $45 lift in monthly ARPU." Subscriber ARPU was $105.63, up from $103.86 in Q3 and $9.20 higher than Q4 2011.

Business Services: Due to economic issues in Europe and the United States, global enterprise revenues declined 2.1 percent year-over-year to $3.8 billion in the quarter. Despite the overall decline, the sale of strategic services, including Terremark cloud and data center services, security and IT solutions, and Ethernet, increased 5.3 percent compared with Q4 2011 and represented 54 percent of global enterprise revenues.

From an overall financial perspective, Verizon reported a loss of $1.48 in earnings per share (EPS), compared with a loss of 71 cents per share in Q4 2011. The telco said the results were impacted by "non-cash pension items in both quarters and additional non-operational debt retirement and other restructuring items in 4Q 2012." It also reported a 7-cent-per-share impact due to Superstorm Sandy yielded 38 cents per share in adjusted EPS (non-GAAP), compared with 52 cents in adjusted EPS in Q4 2011.

For the year, Verizon reported 31 cents in 2012 EPS, compared with 85 cents per share in 2011, while adjusted annual EPS (non-GAAP) was $2.24 in 2012, compared with $2.15 in 2011.

For more:
- see the earnings release
- FierceIPTV has this article
- and here's FierceWireless' take

Special report: Wireline telecom earnings in the fourth quarter of 2012

Related articles:
AT&T, Verizon to see mixed Q4 wireline results, says Morgan Stanley
AT&T Q3: Consumer, business IP drive up wireline revenues 2%