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Summary:

Verizon reported its first-quarter earnings this morning, with most things going as expected. Wireless is booming (1.5 million net additions, 13 percent revenue growth), FiOS TV’s demand seems to be picking up (263,000 new subscribers, putting the total at 1.2 million), and not surprisingly, the company […]

Verizon reported its first-quarter earnings this morning, with most things going as expected. Wireless is booming (1.5 million net additions, 13 percent revenue growth), FiOS TV’s demand seems to be picking up (263,000 new subscribers, putting the total at 1.2 million), and not surprisingly, the company saw accelerated decline in the number of wireline customers. During the quarter, the company lost 762,000 residential lines and about 186,000 lines.

In other words, there is a renewed urgency around FiOS offerings. The fiber broadband and TV offerings can help overcome some of the line losses. During the quarter, the company added 266,000 new broadband connections — 262,000 of which came from FiOS Internet service. The company had a total of 8.5 million connections: 6.7 million DSL-based Verizon High Speed Internet connections and 1.8 million FiOS Internet connections.

What that means is that Verizon’s DSL growth is all but over. At the end of 2007, the company had 8.2 million subscribers. Of the 300,000 new subscribers Verizon added in the first quarter of 2008, 262,000 are FiOS fiber subscribers. That leaves 38,000 DSL subscribers — or roughly 12,600 new additions per month. At present, FiOS Internet is available for sale to 7.9 million premises. Penetration for the service averaged 22.9 percent across all markets.

Verizon, like many other carriers, is in a race against time: It is critical for the phone companies to keep people talking on their lines if they want to sell them broadband and video services in the future.

  1. Cable’s VoIP service and features out numbers FiOS phone for the same price (if subscribing to TV and Internet too).

    From my personal experience, moving from Comcast triple play to Verizon FiOS triple play… the novelty is starting to wear off. In Oregon we still don’t have HD VOD, Comcast now carries more HD channels then FiOS TV (not factoring in PQ into the equation) and FiOS phone is NOTHING more than just phone service with three free additional options.

    Why switch to Verizon; because I’m saving ~40.00 a month. This is with Verizon’s messed up billing. I’m getting the discount on TV and Phone but not Internet because I had it before and there is some issue with added it in…I’m still calling them every month about it.
    There are other reasons to why I switched at the time (Jan, 08): faster upload speed, more HD channels (at that time Verizon had more) and multi-room DVR functionality.

    But getting back to my opinion on why the loss of residential landlines, Verizon’s options don’t match cables. No online access for voicemail, voicemail options, calling options (forwarding, schedule forwarding), calling logs (dialed and received) and email notifications.

    For others killing the landline and only going cellular I can totally understand why. One number and mobility.

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  2. Verizon’s having a hard time, granted. And that’s because DSL is slow and about 5 years behind, technology-wise.

    But Comcast is going to be too if they don’t fix the bandwidth issues in their broadband service (i.e. P2P Sapping, 24+ Hour Outages for no reason, etc.). I, for one, have abandoned them in favor of Clearwire. The current generation is leaning more towards consolidating their entertainment and communications to the computer and frankly, I don’t want to pay for phone and cable to get a good deal on high-speed internet.

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  3. I know people who would be happy to subscribe to Verizon DSL; they’ve been trying to for up to a year. Their CO supports it, but Verizon is no longer “selling” it. Recently, I found out that their area will have FiOS before the end of the year. However, there are no “economy” tiers for FiOS right now. Sure, speed is great, but they just want to get something better than dial-up that doesn’t cost much more than $20. There’s a whole market segment that Verizon is just ignoring, right now and for the foreseeable future. Pity.

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  4. Verizon does not make it easy to do business with them.

    1. Their automated voice response system is IMPOSSIBLE to navigate. 49% of the time I get the wrong department, 49% of the time I am on hold and eventually get disconnected. 2% of the time I am successful.

    2. Ever try DSL technical support? How many times do I need to turn off/on my modem? Plug in the phone line chord? Only to be told I have “spyware” on my computer.. NOT!

    3. Ordered dry loop DSL. Took 2 days before I could get someone to place the order. Was given a service ready date 2 weeks out, that was extended 10 days. Got fedup with the delays. Called Time Warner cable and had internet the next day.

    And they wonder why DSL sales are flat??? It is almost like they do not want to sell the service.

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  5. @ all…. I thought those were problems from 2003 when I left New York and said good bye to their lame DSL service. Looks like things have not changed. Oh well.

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  6. Our upstate NY rural town was recently told by Verizon executives that there is no money budgeted by Verizon for DSL expansion this year. Maybe it’s not growing because they don’t want it to grow. Perhaps all the areas that it makes economic sense to serve with DSL are already served.

    In rural areas I think DSL service would be a good way to hold on to landline customers. If wireless broadband became available, EVDO for example, I might have to use that for broadband. Then I’d be tempted to give up my landline. But not if DSL were available.

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  7. Verizon DSL Sub Tuesday, April 29, 2008

    Obviously, FIOS is replacing DSL. Why then would it matter that VZ’s “growth” in DSL stops?

    The only thing missing is a low-end FIOS package, i.e. 3.0/768 for $15/month. That would blow away cable offerings and get all the cheap-DSL folks like me to convert.

    Not everyone wants to spend $150-200/month on Triple-Play and enhanced entertainment.
    We spend that on our catastrophic health insurance policies instead.

    Our budget provides for $15/month DSL, $17/month landline, $1/month long distance service, regular TV via an OTA digital converter, a pair of $3/month prepaid cellphones, and occasional DVD rentals from RedBox ($1.08/day).

    If Verizon chose to offer some form of “ala carte” pay-tv programming, we’d probably consider it, so long as we could turn it on and off without penalty. As the OTA signal doesn’t do too well on our rabbit-ears, we may put in a prepaid DishNow system when we go up on the roof to put in the HDTV antenna; with billing via a GreenDot card ($5/month), it is said you can turn services on and off at-will, so we might justify a little pay-TV when its really cold out.

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  8. [...] for example, is pushing people to sign up for its more expensive FiOS service. Others are looking to use “speed boosts” as a way to lift their ARPU. This is not a new [...]

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  9. nice article i really like th second line

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  10. [...] delivery of online video “was a huge component” Verizon’s decision to roll out fiber to 18 million homes over a seven year period (next year will be year six). But Verizon isn’t worried about Internet video delivery [...]

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