No more free TVs ding FiOS growth

July 28, 2008

dennystrigl-verizoncoo.jpgVerizon’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.

(Photo: Reuters)

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[...] seems to be adopting the tactics of a major rival. Earlier on Monday we posted about Verizon’s drop-off in FiOS TV subscriber growth last quarter after it stopped giving away flatscreen high-def TVs. The expensive [...]

It’s true that the “V” company is engaged in an all out attempt to control HDTV via Fiber Optic deployment, but they had to slow down due to the numerous customer complaints that have surfaced. Imagine their inexperienced installations crews destroying homeowner driveways and lawns as they push their installations (and they then try to con the helpless homeowners as to the source of their recently acquired problems), there will be a day of reckoning for the big “V” as the neighbors swap stories about misplaced environmental cable units, and the damage left in the wake by all these inexperienced contractor installation crews. The service provided by the Fiber Optic Cable is not worth the problems created and the brand recognition loss to Verizon.

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