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Verizon FiOS Growth Slowing Down
Telco also continues to lose DSL subscribers
by Karl Bode 10:29AM Tuesday Jan 26 2010
Verizon this morning released their fourth quarter earnings report, and while things continue to be rosy on the wireless front, Verizon's facing a significant slowdown in wireline services. According to big red, the company added 2.2 million wireless customers last quarter, for a grand total of 91.2 million wireless subscribers. Verizon still posted a loss for the fourth quarter, caused by a $3 billion charge for layoffs related to the company's slowly dying residential voice business.

After solid FiOS growth in the first half of 2009, things are slowing down for Verizon rapidly. Verizon added just 153,000 new FiOS customers, for a grand total of 3.4 million total FiOS Internet customers and 2.9 million total FiOS TV customers. Wireline operating revenue for the fourth quarter dropped by 3.9% from last year to $11.5 billion. Like most telcos, Verizon continues to bleed copper voice customers, but they're also losing their DSL subscribers (some intentionally).

Despite the company's quarterly reshuffling of DSL promotions, Verizon still lost 107,000 DSL subscribers last quarter, as customers either upgraded to FiOS -- or migrated to cable bundles in markets Verizon's not yet interested in upgrading.

"Our fourth-quarter earnings reflect costs to re-size and simplify our wireline business," says CEO Ivan Seidenberg in a prepared statement. "This transformation is realigning our wireline cost structure, improving productivity, and focusing resources on sales of FiOS and strategic business services."

2009 saw Verizon cut about 13,000 jobs, or roughly 9% of its work force. According to Verizon executives, they expect about the same number of layoffs this year. Verizon ended 2009 with 222,927 employees. There will be roughly 11,000 fewer employees once Verizon gets done offloading 4.8 million phone and 1 million broadband connections in 14 states to Frontier Communications.

As we recently noted, it looks like Verizon's going to put any additional FiOS deployment on hold until they see higher take rates in markets where FiOS already exists. Seidenberg says he'd like to see 40% penetration in existing markets (a lofty goal), and we've heard from several sources that Verizon's all but halted new FiOS TV franchise negotiations. In other words, if you didn't get FiOS during Verizon's initial $24 billion FiOS push, you may be left waiting for some time.

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