Verizon Communications (NYSE: VZ) continues to make progress with its copper to fiber migration, potentially surpassing its initial 300,000 customer goal for 2013.
Shammo (Image source: Verizon)
"The migration of copper customers into FiOS where we have FiOS and shutting the copper down, and that is a program we continue to do," said Fran Shammo, CFO and EVP for Verizon during Oppenheimer's 16th Annual Technology, Internet & Communications Conference in Boston. "Our target was 300,000 this year and we'll probably exceed that customer target of customers moving off copper to FiOS."
Verizon appears to be on track with its copper to fiber transition.
During the second quarter, the telco converted 86,000 customers and over 169,000 in the first half of this year. One of the benefits of the copper-to-fiber migration is that it enables those customers to purchase higher broadband speeds and TV services.
Verizon is also offering its wireless-based Voice Link voice service in certain areas of its footprint as a complement to the migration process.
In addition to areas such as Fire Island, N.Y., a summer island community whose copper network was destroyed by Hurricane Sandy, the telco is offering the service in other areas as a complement to copper-based voice and wireless service.
Shammo said that current regulations require them to offer the Voice Link service in tandem with copper-based voice.
"We actually offer it side by side with copper because there are areas where we still have to offer copper voice and we offer Voice Link as well and we offer wireless on top of that," he said.
The migration may be a way to upsell new services to copper-based customers, but Verizon faces the ongoing challenge of improving wireline margins.
Shammo said although wireline margins are still low, new products such as its Redbox initiative, Digital Media Services and its acquisition of Hughes Telematics for M2M applications create a foundation for new growth in the segment.
"Redbox, Digital Media Services and Hughes Telematics are all negative on wireline right now in our wireline segment," he said. "As I look at those three going into next year, they will start to turn and start to contribute."
Besides the new services, Shammo added that the labor contract agreement it made with its wireline unions "will also start to benefit us next year."
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