Verizon calls an end to FiOS build-out... again.
In a recent Q4 2014 conference call with investors, Verizon CFO Fran Shammo once again revealed that the company is shifting away from landlines to mobile, saying “... we will spend more CapEx in the Wireless side and we will continue to curtail CapEx on the Wireline side. Some of that is because we are getting to the end of our committed build around FiOS, penetration is getting higher.”
Shammo summed up Verizon’s FiOS build-out so far:
“In broadband, we added 145,000 net FiOS customers in the quarter and 544,000 for the year. We have a total of 6.6 million FiOS Internet subscribers, representing 41.1 percent penetration... Overall net broadband subscribers increased 59,000 in the quarter and 190,000 for the full year. In FiOS video, we added 116,000 net customers in the quarter and 387,000 for the year. We have a total of 5.6 million FiOS video subscribers, which represents 35.8 percent penetration.”
In addition, “Verizon has converted more than 800,000 copper customers to fiber since 2011 and said it intends to convert another 200,000 in 2015, though that number would likely be higher if Verizon hadn't halted its fiber expansion.”
Apparently, Verizon’s lack of further interest in FiOS has nothing to do directly with the financial health of the company. Chairman and CEO Lowell McAdam said:
“Verizon posted another year of consistently high operating and financial performance in 2014, with strong cash generation and the return of $7.8 billion to our shareowners. I am confident that Verizon’s assets and market momentum position us to continue to drive profitable growth in 2015.”
In short, Verizon has plenty of money, but people who want FiOS are mostly just out of luck. Or, just in the wrong location.
As Speed Matters has frequently reported, Verizon has built out FiOS in rich suburbs, and then failed to access people in the inner cities or rural areas. The problem is particularly acute in upstate New York where, in 2012, nine city mayors wrote to the FCC to say:
“Verizon has not built its all-fiber FiOS network in any of our densely-populated cities… Yet, Verizon has expanded its FiOS network to the suburbs ringing Buffalo, Albany, Troy, and Syracuse, as well as many places in the Hudson Valley, and most of downstate New York.”
The same conflict has occurred in the Boston and Baltimore areas as well.
4Q 2014 Quarter Earnings Conference Call Webcast (Verizon posting, Jan. 22, 2015)
Verizon nears “the end” of FiOS builds (Ars Technica, Jan. 23, 2015)
Verizon Reports High-Quality Customer Additions in 4Q, Caps Year in Position to Drive Continued Profitable Growth (Verizon news release, Jan. 22, 2015)
NY State mayors tell FCC of concern with Verizon/cable deal (Speed Matters, May 17, 2012)
CWA urges the FTC and the DOJ to take into account in merger review guidelines the role of collective bargaining in counterbalancing employer market power