Verizon may not have any new expansive Fios expansion plans, but where it has rolled out FTTH, Fios broadband penetration is above 40%.
Matt Ellis, EVP and CFO of Verizon, told investors during the Morgan Stanley Technology, Media & Telecom Conference 2018 that broadband subscription rates will likely rise further.
“I expect that Fios broadband penetration number to continue to increase over the next couple of years,” Ellis said.
During the fourth quarter, Verizon added 47,000 Fios internet connections and lost a net of 29,000 Fios video connections.
The telco said the lower video additions continue to reflect the shift from traditional linear video to over-the-top offerings. As of the end of 2017, Verizon had 5.9 million Fios internet connections and 4.6 million Fios video connections.
While Fios video has continued to decline in recent quarters, Ellis said that Verizon sees an opportunity to sell existing and new Fios broadband customers higher speeds to support their over-the-top video appetites.
“If the customer decides to cut the cord on the video piece, I am not getting the video revenue anymore and I do have a significant cost component that goes away,” Ellis said. “When those customers cut the video cord, the quality of the broadband component becomes more important.”
At the same time, Verizon is finding ways to control operational costs by enabling the customer to provision services and rectify issues themselves.
Ellis said that by giving customers tools to get what they need without having to speak to a customer representative is paying off.
“We continue to manage the cost side of the Fios business and the team has done a great job of taking costs out of the business over the past few years,” Ellis said. “It really was a step change we saw last year in the number of times customers need to call us to do things.”
Ellis added that when customers use self-service, "the app is a great example of how we do two things: it takes costs out of the business and makes customers happier because they do things themselves.”