Verizon Quarterly Pay TV Sub Growth Slows, Demand for New "Skinny" Bundles Ahead of Estimates

Verizon Wireless

The telecom giant's FiOS video service added 26,000 subscribers, compared with 100,000 in the year-ago quarter.

Telecom giant Verizon on Tuesday said that it signed up 26,000 net new pay TV subscribers for its FiOS video service in the second quarter, down sharply from 100,000 in the year-ago period.

In the first quarter, the company had added 90,000 new pay TV customers.

Verizon said it ended the second quarter with a total of 5.8 million FiOS video connections. The FiOS TV service competes with cable and satellite TV companies.

Verizon also said it saw "higher-than-anticipated demand for its new ["skinny'] Custom TV packages, with more than one-third of FiOS Video gross customer additions opting for Custom TV and migration demand from existing customers." It added about the new offer that lets customers put together a personalized package of TV programming, which is seen as a move in the direction of a la carte offers: "While Custom TV adoption has an initial negative impact on revenue growth, it is expected to improve profitability."

‎Verizon added 72,000 net new FiOS broadband connections in the latest quarter, down sharply from 139,000 a year earlier and 133,000 in the first quarter. It ended June with a total broadband user base of 6.8 million.‎

Verizon's second-quarter earnings topped Wall Street expectations though.

Verizon chairman and CEO Lowell McAdam lauded the completion of the recent AOL acquisition and said: "We’re now poised to offer customers exciting new over-the-top mobile video services."

On a conference call, CFO Fran Shammo said Verizon plans to launch its first OTT video service in the "late summer." He signaled that news, sports and live content would be key parts of it along with AOL assets Huffington Post and TechCrunch.

Shammo declined to comment on a legal showdown with Disney and its ESPN over Custom TV. ESPN has said Verizon was breaking their carriage deal with the service.

Twitter: @georgszalai