What Can We Expect of Verizon’s FiOS Customer Growth in 2Q16?



Verizon on broadband and TV customer acquisitions in 2Q16

During the MoffettNathanson Media and Communications Summit 2016 held on May 19, 2016, Fran Shammo, Verizon’s CFO and executive vice president, pointed toward possible customer losses in the company’s Wireline component in 2Q16.

Shammo noted, “I would be optimistic if I said we would be net positive for broadband and TV this quarter.”

Shammo noted, “Our installs and new orders have significantly dropped. I think maybe over the last week and a half we just started to do some initial installs and new orders. We have mainly been focused on repair and maintenance.”

Article continues below advertisement

Regarding the ongoing employee strike, he added, “So, I think we are entering into our sixth week at this point. All I can say at this point is that we are at the federal mediation table, the Department of the Secretary [of] Labor called the leadership down to Washington on Sunday. They agreed to go to federal mediation, that is where we are now.”

Customer acquisitions of Verizon FiOS in 1Q16

Now let’s look at Verizon FiOS’s customer acquisitions in 1Q16. As we can see in the above chart, Verizon FiOS’s video and Internet customer acquisitions, on a net basis, have come down significantly in 1Q16 from their 1Q15 levels. FiOS is Verizon’s (VZ) fiber-based Internet, voice, and video service. It can be compared to AT&T’s (T) U-verse, as well as similar offerings of cable players such as Comcast (CMCSA) and Charter Communications (CHTR).

With respect to its FiOS service, Verizon (VZ) had net additions of ~36,000 and ~98,000 in its video and Internet components, respectively, in 1Q16. In 1Q15, the telecom had net additions of ~90,000 and ~133,000 of video and Internet customers, respectively, in FiOS.

For diversified exposure to Verizon’s stock, you may consider investing in the SPDR Dow Jones Industrial Average ETF (DIA). The telecom giant made up ~2% of DIA at the end of April 2016.


More From Market Realist