Verizon's Shammo: Our Northeast wireline properties 'are still underpenetrated'
When Verizon (NYSE: VZ) completes the sale of its wireline properties in California, Florida and Texas to Frontier this quarter, the service provider will have a wireline network that's concentrated in the Northeast. However, a high level company executive says there's room for growth.
Speaking to investors during the 2016 Morgan Stanley Technology, Media And Telecom Conference, Fran Shammo, CFO of Verizon, said that the provider will look for opportunities to grow its consumer FiOS broadband and video services.
"If you're going to launch broadband to the home, you're either going to pick the East Coast or the West Coast, and we have the East Coast population density from Washington, D.C. to Boston," Shammo said. "It's a very good footprint for us and we believe the property we have are still underpenetrated."
Shammo pointed out that Verizon was one of the only pay-TV providers that added subscribers in all four quarters of 2015.
During the fourth quarter of 2015, the service provider added 99,000 new FiOS Internet connections and 20,000 new FiOS video connections. It ended the year with a total of 7 million FiOS Internet and 5.8 million FiOS video customers, representing year-over-year increases of 6.3 percent and 3.2 percent, respectively.
Verizon added just 99,000 new FiOS Internet subscribers in the fourth quarter, which was much lower than the 145,000 subscribers it added in the same period a year ago.
However, Shammo did not specify if it would actually bring FiOS to any new markets within its footprint, a subject that's been a bone of contention for various communities that reside in Massachusetts and New York.
A number of East Coast cities and towns such as Boston, which launched a campaign in October to entice the provider to build in their city, will likely never get the benefits of the FTTH service.
The more likely scenario Verizon will take to further penetrate the wireline market on the East Coast will be to leverage and extend the existing FTTH footprint by offering customers who have a connection to the network already higher speeds.
In January, the telco launched a promotion that allows customers to purchase a triple play FiOS bundle with 100 Mbps symmetrical speeds for $69 a month, reflecting its recognition that consumers want higher speeds as it winds down its FTTH rollout.
- listen to the webcast (reg. req.)
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