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How Verizon’s FiOS Internet Net Additions Trended in 2Q17

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Verizon’s FiOS Internet net additions in 2Q17

In the earlier part of this series, we discussed a few pay-TV market trends impacting Verizon (VZ). The carrier is managing the secular challenges of the pay-TV market by concentrating on its Internet offering in FiOS. In 2Q17, Verizon added 49,000 FiOS Internet customers as compared to 13,000 net customer losses in 2Q16. However, the net gains in FiOS Internet connections in 2Q17 were offset by declines in DSL-based Internet connections. This decrease in total broadband subscribers was due to competitive pressures from cable companies like Comcast (CMCSA) as well as Charter Communications (CHTR), as they managed to add the most Internet customers.

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Verizon’s FiOS Gigabit Connection

During Verizon’s 2Q17 earnings conference call, management indicated that the company has launched FiOS Gigabit Connection in certain markets. The service provides speeds of up to 1 Gbps.

According to a FierceTelecom report on July 27, 2017, “The early success of Verizon’s pivot to selling standalone 1 GB broadband across their Fios territory, in what is arguably the most compelling (and strategically well-grounded) positioning they have ever had.”

Verizon’s FiOS Internet penetration rose by ten basis point to reach 40.2% in 2Q17 as compared to 40.1% in 2Q16. FiOS Internet customers grew by ~4.4% on a YoY (year-over-year) basis to reach ~5.7 million at the end of 2Q17.

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