FiOS joins the millionaires club

Verizon video service hits milestone subscriber mark

Verizon Communications already has more than 1 million TV customers via its FiOS service, making it the 10th-largest multichannel video service provider in the nation, the No. 2 U.S. telecom giant said Monday.

The company's FiOS TV video service, which competes with cable and satellite TV providers, added 226,000 net customers in the fourth quarter, finishing 2007 with 943,000 total subscribers. For the full year, the company added 736,000 FiOS TV users.

As part of its latest quarterly earnings report, Verizon also said it now has more than 1 million FiOS customers. The service launched in September 2005.

This means its subscriber reach is closing in on Mediacom Communications, which has about 1.3 million cable customers.

"Some experts doubted that we could come this far this fast," Verizon Telecom president Virginia Ruesterholz said.

FiOS TV's penetration rate stands at an average of 16% across all its markets, the company said.

Including customers served in an alliance with satellite TV giant DirecTV, Verizon has more than 1.8 million video customers.

With concerns about a looming U.S. recession dragging down stock markets around the world, Verizon executives in a conference call Monday had fairly bullish views to share with investors.

"I would say that we have not seen a change in sales expectations through January," CFO Doreen Tobin said. "We are very confident in our outlook."

Various companies in the cable and telecom space have been seen as more vulnerable to an economic slowdown than in the past. Comcast in particular has signaled some negative effects from the U.S. housing slump and economic sluggishness on their subscriber growth (HR 12/6).

For 2008, Verizon management expects further FiOS growth. "We have been rapidly shifting our force to the growing pieces of our business — that is FiOS and our wireless business," COO Dennis Strigl said. "So both of those will continue to grow in force."

Verizon also reported Monday that it added 264,000 net broadband subscribers in the fourth quarter, bringing to 8.2 million its total number of broadband connections. That is up 17.9% from year-end 2006.

Overall, Verizon reported revenue growth of 5.5% in the fourth quarter and 6% for the year to $23.8 billion and $93.5 billion, respectively.

Its quarterly profit rose 3.9% to $1.07 billion. However, for full-year 2007, Verizon's profit declined 10.9% to $5.5 billion.