Verizon Loses 61,000 Pay TV Subscribers, Posts Strong Broadband Gains

Verizon CEO Hans Vestberg
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Verizon CEO Hans Vestberg

The telecom giant, led by CEO Hans Vestberg, added 144,000 net new broadband customers, "the most since the fourth quarter 2014."

Telecom giant Verizon on Wednesday reported that it lost 61,000 net pay TV subscribers for its FiOS consumer video service in the third quarter, compared with a loss of 67,000 in the year-ago period and a loss of 81,000 in the second quarter.

As it has done in the past, the company cited "the ongoing shift from traditional linear video to over-the-top offerings." It ended September with more than 3.9 million total video subscribers.

Verizon added 139,000 net customers for the FiOS internet service, compared to 30,000  in the year-ago period. Together with business internet customers, the firm said it added 144,000 net new users in the period, "the most since the fourth quarter 2014."

The latest results cover the company's third quarter, which was the second full quarter of coronavirus pandemic fallout.

The Verizon Media unit, which includes the likes of Yahoo, AOL and HuffPost, posted third-quarter revenue of $1.7 billion, down 7.4 percent from the year-ago period, but an increase of 21.2 percent from the second quarter. "Year over year revenue trends improved each month during third-quarter 2020," the company said. "Trends resulting from the COVID-19 pandemic continued to impact both search and advertising in the quarter, though media continues to drive increased customer engagement on its owned and operated properties."

In its wireless business, Verizon reported 136,000 wireless retail postpaid net additions, driven by 142,000 phone and 107,000 other connected device net additions, partially offset by 113,000 tablet net losses. offset by. Postpaid smartphone net additions were 258,000.

Verizon, led by CEO Hans Vestberg, did not say how many of its users have taken advantage of the telecom giant's deal with the Walt Disney Co. for the Disney Bundle, which is included with select Verizon wireless unlimited plans, making for a $12.99 per month value. The bundle includes Disney streaming services Disney+, Hulu and ESPN+.

"We don’t do that for every brand," but for Disney and other brands that "match" Verizon’s, Vestberg had told a recent investor conference. Management had previously also said that a deal for Disney+ had exceeded the firm's expectations.

Management on Wednesday again touted the Disney offer as a sign for Verizon's appeal to entertainment companies as a network partner.

Verizon's third-quarter revenue fell 4.1 percent to $31.5 billion "due to lower customer activity and the timing of certain device launches." Earnings per share fell to $1.05, compared with $1.25 in the year-ago period, but adjusted earnings matched the $1.25 figure recorded in the comparable quarter of 2019. The company estimated that the coronavirus pandemic had a negative impact on earnings of approximately 5 cents per share.

Verizon's stock made slight gains in early Wednesday trading.