How Verizon’s Fios Internet Net Additions Trended in 4Q17

In the preceding part of this series, we discussed a few pay-TV market trends impacting Verizon (VZ). The company is managing the secular challenges of the pay-TV market by focusing on its Internet offering in Fios. In 4Q17, Verizon added 47,000 Fios Internet customers compared to 68,000 net additions in 4Q16. 

However, the net gains in Fios Internet connections in 4Q17 were offset by declines in DSL-based Internet connections. This reduction in total broadband customers was mainly due to competitive pressures from cable companies such as Comcast (CMCSA) and Charter Communications (CHTR), which added the most Internet customers.

During the recent Verizon’s 4Q17 earnings conference call, Verizon’s management highlighted that Fios Gigabit Connection continues to gain traction. The telecom company launched this service in 2017 in select markets and offers speeds of up to 1 Gbps.

Verizon’s Fios Internet penetration decreased by 30 basis points to reach 40.1% in 4Q17 compared to 40.4% in 4Q16. Fios Internet customers grew ~3.5% on a year-over-year (or YoY) basis to reach 5.9 million at the end of 4Q17.