Verizon CFO Matt Ellis expressed confidence the company’s Fios business would continue to grow, despite a rapidly changing competitive landscape.
Speaking during a Credit Suisse investor conference, Ellis noted its Fios customer base at the end of Q1 2021 was more than 5% higher than the same quarter in 2020. He added in the three quarters from Q4 2020 to Q1 2021, the business posted “well over” 300,000 net additions in its footprint.
“We are absolutely excited about what we’re seeing in Fios,” Ellis said. “I don’t see any reason why we should expect that to slow down.”
Asked about the competitive environment, the CFO talked up the company’s mix and match bundle strategy for its TV, internet and phone services. Though things got off to a slow start after its launch in Q1 2020 due to the Covid-19 pandemic, Ellis said demand surged as lockdowns eased and retail shops started to reopen.
“We let the customer choose what bundle they want,” he said. While TV options can be part of the package, Ellis noted “we’re seeing more and more customers go broadband only than we have historically.”
His comments appear to reflect a broader trend in the U.S. broadband market. A new report released by analyst company Parks Associates on Wednesday showed that the percentage of households with standalone broadband service reached 41% in Q1 2021, up from 33% in Q1 2018. The cost of this service has risen 64% over the past decade, rising from $39 per month per household in 2011 to $64 in 2021. The report was based off a survey of 10,000 U.S. broadband households.
A drop off in pay-TV subscriptions has played a large part in falling bundle rates, but another package combination is gaining steam. As Parks Associates senior analyst Kristen Hanich noted in a statement, “the fastest growing” bundle segment “is a standard double-play combining home internet and mobile service.” The percentage of households with this pairing increased from little over 10% in Q1 2019 to 19% in Q1 2021, the report showed.
Ellis also touted Verizon’s prospects in the fixed wireless access (FWA) market, reiterating it plans to reach 15 million homes by the end of this year, nearly 30 million by 2023 and 50 million by 2025. Those figures include both its 4G LTE FWA offer as well as its 5G Home service.
The company still feels “really good about the opportunity,” with Ellis stressing it will allow Verizon to “to take the wireless asset and drive an additional revenue stream off of it…first time in wireless we’ve really had the chance to do that.”
“Customers are excited about the opportunity of having choice in this space, they’ve not always had that,” he explained. “We’ve seen the same thing in the Fios footprint where we brought choice to customers there and had a lot of great success.”