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Verizon’s FiOS Service: How Does It Stack Up after 3Q15?

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Verizon’s FiOS service

In the previous part of this series, we discussed consumers’ preference for the high-speed offerings of Verizon’s (VZ) FiOS service. We mentioned that the penetration of the Quantum service in the FiOS consumer Internet subscriber base continued to grow in 3Q15. In this part, we’ll look at the competitive Internet proposition of the FiOS service. We’ll compare the speed offered by Verizon’s FiOS with other large ISPs (Internet service providers) in the United States.

We’ll specifically use the Netflix (NFLX) USA ISP index for September 2015 as a proxy for Internet speeds from the top ten ranks in the index. Note that the index uses the average Internet speeds that Netflix users get during prime time.

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Internet speeds of large ISPs in September 2015

As you can see in the above chart, and as per the Netflix USA ISP Index, among the large ISPs, Verizon’s FiOS had the fastest average Internet speed for September 2015. Plus, compared to the previous month, Verizon’s rank in this metric improved a notch in September.

Meanwhile, the top position, Cox, came down a notch in September. On a month-over-month basis, Cablevision (CVC), Bright House, Time Warner Cable (TWC), and Charter (CHTR) maintained their respective ranks.

Comcast (CMCSA) dropped a notch from seventh in August 2015. Plus, AT&T’s (T) U-verse maintained its tenth spot in this metric among the large US ISPs in September.

Instead of taking on direct exposure to Verizon’s stock, you may take on diversified exposure to the telecom company by investing in the SPDR Dow Jones Industrial Average ETF (DIA). The ETF invested ~1.9% of its portfolio in the telecom company at the end of August 2015.

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