
What cable cutters? If Verizon Communications latest quarterly earning are any indication, over-the-wire services have little to worry about in the near future.
Verizon’s wireline FiOS revenue for pay TV and Internet leaped 15.1% higher in the prior quarter, up to $2.6 billion. That figure is especially telling, given that Verizon FiOS hasn’t expanded into any new markets lately. Verizon’s pay-TV service seems to be figuring out how to get more customers out of the markets it’s already in, probably to the detriment of other cable and satellite providers in the same markets.
“FiOS continues to make inroads in the internet and video markets taking away share from the cable companies,” Roger Entner, Lead Analyst and Founder of Recon Analytics commented.
All told, FiOS added 169,000 new customers to its TV plans, and 188,000 new Internet customers. The lack of decline in users broadly demonstrates that there still hasn’t been a mass “switch-off” from pay TV providers, as these businesses are still showing signs of growth.
Verizon did pretty well in the wireless side of its business, too, pulling in $19.5 billion in revenue, up 6.8% from the first quarter of 2012. The company also noted that per-account revenue went up 6.9% from this time last year, a sure indicator that more customers were signing up for those hefty data plans.
They’ll need those data plans, too – for the second straight quarter the iPhone made up more than 50% of smartphone sales, clocking in at 55.5%. Since smartphones made up for 61% of contract user sales that means 33.9% of all phones sold to Verizon Wireless contract users were iPhones.
The story of Verizon’s first quarter earnings is very much one of in-market attrition – they are building revenue by offering plans and services that customers like, and still increase Verizon’s bottom line.
“Verizon is firing on all cylinders. In an increasingly saturated market, the company is accelerating subscriber, revenue and profit growth. The ShareEverything plan is being received enthusiastically by consumers,” Entner added.
The growth of smartphone sales over feature phones is something businesses should continue to note as well, since it effectively means the target audience for reaching mobile users is still getting bigger, just like everyone predicted.
It’s a perfect circle, in a way, as more smartphone customers participate in commerce and social interaction with their devices, Verizon and its competitors will continue to see smartphone growth… which will in turn spark the availability of more commercial services. Today’s earning report is part of the turning of this mobile commerce wheel, which shows no signs of slowing.
Coupled with the growth of its wireline FiOS service, Verizon is sitting pretty in the marketplace now.