No more free TVs ding FiOS growth
Verizon’s new fiber optic (FiOS) TV service added fewer subscribers this quarter with just 176,000 compared with 263,000 in the first quarter. This surprised some analysts who had expected FiOS to continue its same rapid pace of growth, backed by Verizon’s huge marketing spend and aggressive push.
But Verizon Chief Operating Officer Denny Strigl (pictured) told analysts the slowdown in FiOS TV growth was explained by the end of Verizon’s popular promotion giving away free high definition television sets.
On the plus side, not giving away TV sets helped keep mounting subscriber acquisition costs under control thereby boosting its bottom line, the No. 2 U.S. phone company told Wall Street.
Several Wall Street analysts and cable executives have derided Verizon for the billions of dollars it is spending on acquiring FiOS customers saying it will never make a return on its investment.
But Collins Stewart analyst Tom Eagan says cable operators can’t relax just yet especially Time Warner Cable and Cablevision who have New York cable systems – an area Verizon is very focused on.
“We expect higher net adds in the third quarter with the roll out into Manhattan. Verizon stated this morning that it plans to aggressively promote the NYC roll out of its FiOS TV service and offer 100 HD channels., which is currently above the TWC offering,” said Eagan in a note to clients on Monday.