Verizon Adds 21,000 FiOS Pay TV Subs, Still Assessing Impact of Yahoo Data Breaches
"We have not reached any final conclusions yet," CFO Matt Ellis tells an earnings conference call.
Telecom giant Verizon on Tuesday said it added 21,000 net pay TV subscribers for its FiOS video service in the fourth quarter, compared with 20,000 in the year-ago period.
In the third quarter, it had added 36,000, compared with 45,000 in the year-ago period.
FiOS competes with cable and satellite TV services. Its broadband service added 68,000 subscribers in the fourth quarter, compared with 99,000 in the fourth quarter of 2015.
Wells Fargo analyst Jennifer Fritzsche had predicted Verizon would add 30,000 net FiOS video subscribers and 75,000 FiOS internet customers in the latest quarter. At the end of 2016, Verizon had 5.7 million FiOS internet connections and 4.7 million FiOS video connections.
"Customer demand for Custom TV continues to remain strong," the company also said on Tuesday about its service, which offers "skinny" pay TV bundles.
The company in its earnings report also mentioned its July agreement for the $4.83 billion acquisition of Yahoo's core internet business, whose closing has been delayed by two disclosed hacks of 1 billion-plus Yahoo email accounts. "Regarding the Yahoo acquisition, Verizon continues to work with Yahoo to assess the impact of data breaches," it said.
On the earnings conference call later in the morning, Verizon CFO Matt Ellis said: "We are still working with Yahoo to assess the impact of the breaches, and we have not reached any final conclusions yet."
But he said Yahoo would further help build online traffic with its 1 billion-plus monthly average unique viewers. Yahoo on Monday had said the deal would close in the second quarter instead of the first.
Those hoping for commentary on possible acquisitions amid renewed recent rumors that Verizon could look to buy Dish Network, a cable operator or a content company after AT&T's $85.4 billion deal for Time Warner didn't get much to work with on Tuesday.
“I am not going to comment on any specific combinations that have been rumored over the years," Ellis said. "We will continue to look for opportunities to expand and grow the business." And he said Verizon would be disciplined, with its key focus being on creating long-term value for the business and its shareholders.
Asked about how the Trump administration would affect the regulatory environment, Ellis said: :It’s just too soon to tell exactly where we are going to be. We look forward to working with the regulators whether it is the FCC or others."
Verizon has made go90 a key part of its effort to diversify beyond its telecom services, especially as it chases scale through the acquisitions of AOL and Yahoo. The company confirmed Monday that it is laying off 155 employees who work on its go90 streaming service, with the majority of the cuts coming from Verizon's San Jose, Calif. office where much of the product team working on go90 is based.
Verizon in October acquired the team and technology behind Vessel, the streaming service that ex-Hulu CEO Jason Kilar launched in 2014. The acquisition was largely seen as an acqui-hire intended to bring Vessel's engineering talent into Verizon to help it with go90 and other media efforts. At the time, Verizon said that CTO and co-founder Richard Tom would remain with the company, leading technology and operations for Verizon Digital Entertainment. The deal was to be finalized by the end of the year, and these layoffs appear to be at least in part related to the completion of the acquisition.
Go90's programming, a mix of live sports, full length TV and web series, has yet to take off with the young millennial audience it's trying to reach. Over the summer Verizon hired digital veteran Ivana Kirkbride to oversee go90 content and in the months since the hire, the company has made big bets on projects like Megyn Kelly-produced Embeds and other projects from high-profile names.
In January, Verizon executive vp Marni Walden told investors that she was "encouraged" by the early performance of go90 but acknowledged that "we still have a long way to go."