Verizon sees more signs of pay-TV cord cutting
Verizon provided more evidence that consumers continue to opt for broadband-delivered TV offerings such as Netflix and Amazon Video over traditional pay-TV service.
The telecom giant add 66,000 Fios broadband customers, while losing 18,000 Fios video customers during the July-September third quarter, the company said Thursday. Overall, Verizon now has 5.8 million Fios broadband customers and 4.6 million Fios Video customers.
Verizon’s decline in video subscribers follows AT&T’s report last week in a filing with the Securities and Exchange Commission that it had lost 90,000 video subscribers during the third quarter. That loss would have been larger had AT&T not added 300,000 new subscribers on its DirecTV Now broadband-delivered TV service.
Similarly, Comcast has forecast it will report losses of as many as 150,000 subscribers during the July-September period when it releases its Q3 financials next week.
“There’s nothing new here in terms of the trends we have been seeing over the past few years around whether it’s cord cutting or cord-nevers or whatever else,” said Verizon chief financial officer Matt Ellis in a conference call after the company released its earnings results. “Two or three years ago, we really started speaking about the fact the traditional linear TV bundle is not long-term sustainable . ... We are not surprised.”
The trend here goes beyond Verizon alone as the number of homes with broadband Internet service is expected to hit nearly 100 million this year, up from 97.6 million last year, according to The Diffusion Group. The number of broadband homes has surpassed those with pay TV service, the firm estimates.
Overall, Verizon posted mixed third-quarter results. Net income of $3.62 billion remained flat compared to the same period last year and fell short of expectations of $3.96 billion, based on analysts polled by S&P Global Market Intelligence. Adjusted earnings of 98 cents per share beat expectations of 97 cents. Revenue of $31.72 billion rose 2.5 percent and beat expectations of $31.44 billion.
Verizon, the nation’s largest wireless provider, added 603,000 wireless customers including 486,000 smartphones, compared to 242,000 in the same period a year ago. Accounting for departing subscribers, Verizon added 274,000 net wireless phones, as well as net tablet additions of 91,000 and 238,000 other connected devices including wearables.