How Was Verizon Fios’s Revenue Growth in 1Q16?
Diving Deeper into Verizon's 1Q16 Results
Fios revenue grows in 1Q16
In the previous part of the series, we learned about Verizon’s (VZ) marginal growth in consumer wireline revenue in 1Q16. This revenue stream rose by ~0.8% to ~$4 billion YoY (year-over-year) during the quarter.
Verizon Fios’s revenue growth continued to slow in 1Q16. Fios derives most of its revenue from the consumer wireline segment. Fios’s revenue rose by ~5% YoY to ~$3.5 billion in 1Q16. In 4Q15, Fios’s revenue rose by ~6.8% YoY.
Growth in Fios customers in 1Q16
On a YoY basis, the number of Fios Internet connections rose by ~5.7% to reach ~7.1 million in 1Q16. Additionally, the number of Fios video subscribers rose by ~2.2% YoY to ~5.9 million. Now, let’s look at the momentum of customer acquisitions in these Fios components during 1Q16.
The telecommunications (telecom) company had net customer additions in Fios Internet and Fios video of ~98,000 and ~36,000, respectively, during 1Q16. In 4Q15, net customer additions in the service’s Internet and video components were ~99,000 and ~20,000, respectively.
About Fios
Fios is Verizon’s fiber-based Internet, voice, and pay-TV service for both consumers and businesses. The service is similar to AT&T’s (T) U-verse. Additionally, it’s comparable to the offerings of cable players such as Comcast (CMCSA) and Time Warner Cable (TWC).
Instead of taking direct exposure to the stocks of players in the US telecom industry, you may consider taking diversified exposure to the space by investing in the SPDR S&P 500 ETF (SPY). SPY held a combined total of ~2.8% in AT&T, Verizon, CenturyLink (CTL), Frontier Communications (FTR), and Level 3 Communications (LVLT) at the end of March 2016.
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