Shammo on Verizon Q4: Cable deals won't deter FiOS competition

Verizon (NYSE: VZ) won't let marketing deals it has with Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), Bright House and Cox Communications stop it from targeting cable subscribers with its FiOS TV, Internet and phone products, CFO Fran Shammo said Tuesday.  

Shammo

"We will compete vigorously with this (FiOS), even with the agreement we entered into with the cable companies," Shammo told analysts regarding the spectrum deals Verizon struck with cable MSOs in December which will also see the telco offer joint promotions on cable and wireless phone service with cable operators.

Verizon reported Tuesday that it picked up 194,000 FiOS TV subscribers during the fourth quarter, and Shammo insists that the company will hit step up its efforts to innovate and market its FiOS services. "I'm very optimistic about our FiOS penetration for 2012," he added.

Shammo told analysts that New York, where Verizon competes with Time Warner Cable, Cablevision (NYSE: CVC) and RCN, is its fastest growing market for new subscribers. The company has also also hit the 40 percent penetration rate for its FiOS TV service in Virginia, where it competes with Comcast, Cox Communications, Charter Communications (Nasdaq: CHTR) and other cable operators.

While Verizon lost more than 100,000 DSL subscribers during the quarter, it picked up 201,000 FiOS Internet subscribers. That left it with a net increase of 98,000 broadband Internet customers.

Shammo said Verizon plans to migrate parts of its copper infrastructure to FiOS plant in areas where it has "chronic problems" that require it to make repairs more than twice annually. "The actual financial benefit of transforming that network to FiOS pays for itself within a year. That brings an enormous expense savings," he said.

Verizon continues to struggle to retain voice subscribers. It saw its total voice connections, including FiOS and traditional switched access lines, drop by 7.2 percent in Q4 to 24.1 million.

Shammo said Verizon is focused on expanding penetration rates for its FiOS services in markets that have already launched service, and targeting subscribers in multiple dwelling units.

The company reported $10.1 billion in wireline revenue during the fourth quarter, down 1.5 percent compared to the same period in 2010.

For more:
- see the earnings release

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