Verizon adds 72K new Fios customers in Q3

Verizon found a way during the third quarter to overcome the challenges of a slow housing move market as it saw its Fios subscriber base grow again.  

In recent quarters, slowing housing move activity has negatively impacted the pace of broadband subscriber growth for wireline operators and cable MSOs. According to a recent Evercore ISI report, housing activity in the AT&T footprint was mainly in line with the national average but slightly worse in the Verizon and Comcast footprints.

During the quarter, the service provider added 72,000 new Fios subscribers, up 11,000 year-over-year.

Total broadband net additions of 434,000, representing the fourth consecutive quarter that Verizon reported more than 400,000 broadband net additions. The broadband net addition figure included 384,000 fixed wireless net additions, an increase of 42,000 fixed wireless net additions from the third quarter of 2022.

Verizon now has approximately 10.3 million total broadband subscribers, including nearly 2.7 million subscribers on its fixed wireless service. Verizon’s consumer operating revenue was $7.5 billion, up 2.7 percent year-over-year, and segment operating income margin was 29.9 percent, an increase from 28.4 percent in the third quarter of 2022.

“Fios subscribers were up almost 20% year-over-year, one of our best performances in seven years, said Hans Vestberg, CEO of Verizon, during the third-quarter earnings call. “Fios remains a coveted, high-quality service, and we continue to take share and deliver substantial numbers even in a lower mover environment.” 

He added, “We're pleased with the success of Fios with strong gross adds and retention, reflecting the quality and overall value of the product.”

One Fiber strategy

Verizon continues to maintain its One Fiber build strategy. This concept was hatched in 2016 when the operator decided it would rather own than lease the fiber running to its cell towers. The provider wanted a fiber network that could be used for wireless towers, residential broadband and business services.

It initially tackled a build in Boston and outlined plans to run fiber to more than 60 markets outside its ILEC footprint. As of January, Verizon said its One Fiber network reached 80 markets.

Vestberg said it will enhance its fiber network to enable Fios and connect its fixed wireless access (FWA) customers. “We will continue to invest in Fios to see our customers,” he said. “Outside the Fios footprint, our primary strategy is to build on One Fiber and do fixed wireless access to capture the market before anybody else is even remotely there.”

He added that Verizon has the assets it needs to compete in the broadband market.

“We have all the capacity and technology in the field right now,” Vestberg said. “And the quicker we can come out, the quicker we can meet the demand out there and the customer that wants our broadband, which is a lot.”

Reviewing fiber assets

With Consolidated being purchased by a private equity firm and Shentel announcing its acquisition of Horizon this week, there will be growing speculation about further M&A in the fiber and wireless industry segments.

During the earnings call, analysts pressed Vestberg about the possibility of the company purchasing other fiber assets that could be a fit. “Regarding fiber assets, first of all, I love our strategy,” he said. “I mean, our strategy is clear. We built much fiber in the Fios footprint and had a record quarter of Fios subscribers.”

However, Vestberg said the company will always consider purchasing other assets that could complement its fiber and wireless networks.

“Over time, of course, we will always look into it,” he said. “And anyone that would dispose of any telecommunication assets in the market will talk to us, but the hurdle is high. We have a great network and a perfect strategy around our technology.”