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Cable Technology Feature Article

April 16, 2009

More Evidence Verizon Made Right Bandwidth Bet

By Gary Kim, Contributing Editor

Though one always has to be careful when comparing market performance, it does appear that Verizon (News - Alert), with its high-profile FiOS program, is benefitting from the decision to go with a fiber to home program. Or at least that is a conclusion one might reach, looking at in-region revenue growth. 

In the fourth quarter of 2008, Verizon had in-region consumer revenue growth of 2.9 percent, while AT&T (News - Alert) had in-region consumer revenue growth of negative 5.3 percent. Qwest Communications had negative in-region consumer revenue growth of 7.5 percent.
Verizon is the only former large U.S. incumbent local exchange carrier that has positive revenue growth within its consumer wireline segment, indicating, in the estimation of Fitch Ratings analysts, that the company has been most successful thus far, relative to the other large ILECs, in transforming its wireline business.
During the fourth quarter, revenue from Verizon’s FiOS (News - Alert) product platform grew approximately 42 percent on a year-over-year basis and accounted for 31 percent of consumer retail revenues.
While AT&T's U-verse service continues to scale, the service has yet to have the same effect on the company’s consumer–in-region revenues, which declined 5.3 percent during the fourth quarter of 2008 relative to the same period a year earlier. In part, that may be a result of less in-region U-verse availability, however.
AT&T’s consumer internet protocol revenue, which includes U-verse service, broadband and video, contributed 26 percent of AT&T’s consumer-in-region revenues in the fourth quarter of 2008 and grew by 21.4 percent relative to the same period a year earlier.
Of the three largest ILECs, Qwest (News - Alert) has experienced the most rapid deterioration of consumer wireline revenues, with fourth-quarter consumer wireline revenues declining 7.5 percent on a year-over-year basis.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jessica Kostek