Verizon reported relatively solid results in its wireline business, showing revenue slightly below some analyst expectations but FiOS net customer additions of 98,000, above some predictions.
"In the consumer [wireline] business, FiOS remains the driver of revenue growth, and now represents around 81 percent of consumer revenue. In the first quarter, consumer revenue grew 28 percent," Verizon CFO Fran Shammo said during the company's earnings conference call with investors.
"The increased penetration of Quantum and the desire for higher data speeds were the primary drivers of FiOS growth," he added.
"VZ had 98K FiOS Internet and 36K video net adds in the quarter," noted the analysts at Wells Fargo. "We believe the push for more broadband vs. video adds is purposeful one given rising content costs."
Shammo said that 78 percent of consumer FiOS internet customers subscribed to data speeds of 50 Mbps or higher. Additionally, he said that FiOS customers continue to auger toward faster speeds. He said that fully 60 percent of new customer FiOS sales opt for 100 Mbps speeds and above.
Verizon's management also provided an update on the ongoing strike by the company's wireline employees. Click here for that story.
Overall, Shammo said that the company continues to work on stabilizing wireline revenues.
Interestingly, Shammo also said that Verizon may look to form similar additional partnerships with cities like the one it did recently with Boston. Verizon earlier this month struck an agreement to bring FiOS to Boston via a $300 million, six-year investment plan that will replace the city's aging copper network infrastructure with fiber. Boston city leaders have pledged to help expedite the permitting process to encourage the new FTTH build out.
"We'll take one city at a time. Obviously we still don't have Alexandria built out or Baltimore, so if we get to a position where we believe we will need to invest in [wireless network] densification in those cities, then that's an opportunity for us to take a look at it. But at this time we're concentrating on Boston," he said.
Data center: Shammo also addressed Verizon's continued efforts to potentially sell its data center. Shammo in January confirmed the carrier is looking to see if the data center business is something the company should keep or sell to another provider.
"On the data center sale, I would consider it exploratory. There's a lot of activity going on, but nothing at this point that I'm prepared to announce in a public forum. But we continue to explore that activity," he said.
Wireline financials: Overall, Verizon's total FiOS revenues grew 5 percent, to $3.5 billion, a year-over-year growth of 4.7 percent.
Verizon said its wireline segment notched an operating income of $0.6 billion, and the margin was 6.3 percent. The business overall generated $2.2 billion in EBITDA, which the company said was a year-over-year increase of 1.2 percent. Verizon's consolidated wireline revenues fell 0.9 percent year-over-year to $9.47 billion.
The company added that its Global Enterprise revenue was down 3.1 percent year-over-year, and its Global Wholesale revenue was down 4 percent during the same period.
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