Verizon Adds 36,000 Pay TV Subs in First Quarter, Stays Mum on Yahoo

Associated Press
Verizon

The telecom giant, which is a key player in the auction of internet company Yahoo, had signed up 90,000 in the year-ago period.

Telecom giant Verizon on Thursday said that it signed up 36,000 net new pay TV subscribers for its FiOS video service in the first quarter, down 60 percent from the 90,000 net additions in the year-ago period, but up from 20,000 in the fourth quarter of 2015.

The fourth-quarter figure had marked the lowest sub growth for the service in any quarter since its launch in 2006. The previous low had stood at 26,000.

The company's earnings conference call brought no new insight into the auction of Yahoo and the bid Verizon is known to have submitted in the first round. “I’m not going to speak anything to do with Yahoo," said CFO Fran Shammo when the only analyst question about Yahoo came up. He hadn't discussed the internet company in his prepared remarks.

Verizon, after previously acquiring AOL and Millennial Media and last year launching millennials-focused mobile video service Go90, has said millennials remain a core focus for the company. Verizon also recently acquired a stake in AwesomenessTV, and partnered with Hearst to jointly acquire male-focused media company Complex. Those deals “position us as partial owners in the no. 1 digital media brands for young millennials," Shammo said Thursday.

He said Go90 was still in the early stages of gaining traction in reach and engagement. Discussing AOL, Shammo lauded it for hitting its highest first-quarter revenue in five years.

Verizon ended the first quarter with a total of 5.86 million subscribers to its FiOS video service, which competes with cable and satellite TV companies.

Analysts have said that telecom companies' pay TV subscriber growth has been weakening year-over-year, while big cable operators are expected to grow their video subscriber figures this quarter.

The company has also touted the demand for its Custom TV service, which offers "skinny" pay TV bundles. On Thursday, Shammo again mentioned that customers are looking to downsize video bundles, with demand for Custom TV "strong." He said 38 percent of first-quarter FiOS video sales were or Custom TV. Shammo emphasized that while those customers provided less revenue, they bring a higher profit margin than traditional FiOS TV customers due to the service's "considerably" lower content cost.

Verizon also reported Thursday that it added 98,000 net new FiOS broadband connections in the first quarter, compared with 99,000 in the fourth quarter and 133,000 in the first quarter of last year, to end the first quarter with 7.13 million.

"Verizon’s strong first-quarter results demonstrate our capacity to compete effectively, while executing on our plan of continued network leadership and seeding new growth markets in mobile video and the Internet of Things,” said chairman and CEO Lowell McAdam.

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