As Verizon reported favorable second quarter growth for fixed wireless and Fios, executives took some time to address the recent Wall Street Journal report on lead-sheathed cables.
The company has stated its copper network is comprised less than 540,000 miles of cable, roughly half of which is aerial, according to CFO Tony Skiadas. He reiterated lead-sheathed cables make up a “small percentage” of those miles but did not quantify the amount further.
“As a result of the age of this infrastructure and the history of the industry, records are incomplete as to exactly how much of the cable in our network has lead-sheathing,” he said on an earnings call.
Verizon’s percentage doesn’t take into account parts of the network that were previously owned by MCI and XO Communications, Skiadas added, “because we are still reviewing the historical records of those companies.”
As for potential remediation costs, he said it’s “far too soon” to predict how the issue will financially impact the company. Though New Street Research has pegged the total cost of remediation for Verizon to be as much as $4.1 billion.
“There are a number of unknowns in this area, including whether there is a health risk presented by undisturbed lead-sheathed cable, and if there is a risk, how that risk should be addressed,” said Skiadas.
He claimed because Verizon’s lead-sheathed cable “was used as a feeder and distribution cable” and doesn’t run in individual homes or apartments, it’s “generally in locations that minimize the potential for public contact.”
Still, Verizon is conducting its own testing on the sites the WSJ flagged for lead exposure. The company expects to have the results of that testing in “several weeks,” added Skiadas.
FWA, Fios gains
Verizon posted a total of 418,000 broadband net additions in Q2 2023, compared to 268,000 subs in the year-ago quarter. It marked the third consecutive quarter the operator reported more than 400,000 wireline net adds.
Fios net additions rose to 54,000, up from 36,000 in Q2 2022 but dropped sequentially from 67,000 in the first quarter. Fixed wireless access (FWA) net adds reached 384,000, a year-over-year increase from 256,000. Verizon said it now has nearly 2.3 million subscribers on its fixed wireless service.
CEO Hans Vestberg noted on the call the combination of FWA and Fios represented “remarkable broadband performance” for the quarter.
“It’s clear, fixed wireless access is here to stay as a proven competitive broadband product,” he said. “We’re well on track to meet our targets of four to five million fixed wireless active subscribers by the end of 2025.”
Third Bridge analyst Jamie Lumley noted fixed wireless “remains a strong growth driver” for Verizon.
“With Verizon’s ample investments in spectrum assets to build out this offering, there is ample opportunity to continue to scale this service and take market share,” he said.
Verizon’s consolidated revenue of $32.6 billion was down 3.5% year on year from $33.8 billion, while net income slid 10.3% to $4.8 billion. Consumer revenue dipped from $25.6 billion in Q2 2022 to $24.6 billion, while business revenue dropped from $7.6 billion to $7.5 billion.