Verizon’s pay-TV business continues to fade into the sunset: The telecom giant shed 82,000 Fios TV subscribers in the first three months of 2021, falling to a 10-year low of 3.77 million.
Verizon’s Fios Internet segment added a net 98,000 subs, to stand at 6.3 million at the end of the period. Factoring in business customers, the company gained 102,000 total Fios Internet accounts — the most first quarter total Fios Internet net additions since 2015.
Another bright spot: Revenue at Verizon Media, which includes the former AOL and Verizon businesses, climbed 10.4% in Q1, to $1.9 billion. It’s the second consecutive quarter of double-digit year over year growth for Verizon Media, after years of stagnation and declines. The company said the media unit’s growth in the quarter was driven by a 26% uptick in advertising revenue, while revenue from owned-and-operated platforms grew 13% year over year.
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Given the trend of cord-cutting, coupled with the rise of streaming services, Verizon essentially views traditional TV as a dead-end product.
“The company’s broadband subscriber growth, combined with an upward shift in speed tiers, more than offset pressure from secular video trends and is expected to continue to drive solid revenue performance,” Verizon said in announcing Q1 results.
At this point, Verizon has stopped actively marketing Fios TV, in favor of heavily promoting Fios Internet and fixed-wireless 5G home broadband — and it’s reselling Google’s YouTube TV ($65/month) to broadband customers. Last year, it killed off its triple-play TV, phone and internet bundles.
On the wireless side, the telco has leaned into its deal with Disney — bundling Disney Plus, Hulu and ESPN Plus for no extra charge for customers on its top mobile plans — along with similar pacts for Discovery Plus and Apple Music.
The main narrative for Verizon continues to be 5G, the next-generation wireless technology that the company is banking on fueling a multiyear upgrade cycle and expansion. In Q1, Verizon paid about $45 billion to the FCC for spectrum it won at the recently completed C-Band auction. Over the next 12 months, Verizon expects to have incremental 5G bandwidth via the new spectrum available to 100 million people in 46 initial markets, delivering 5G Ultra Wideband performance.
Verizon shed 326,000 wireless retail postpaid customers in Q1, an improvement over a loss of 525,000 in the year-earlier period at the front end of the COVID-19 pandemic. For the first three months of 2021, consumer wireless service revenue rose 1.5%, to $13.7 billion, which the telco credited to continued adoption of wireless unlimited plans. Verizon’s consumer wireless equipment revenue jumped 24%, to $4.2 billion, helped by Apple’s launch last fall of the iPhone 12.
Overall, Verizon reported revenue of $32.87 billion for the first quarter of 2021 and adjusted earnings per share of $1.31. Wall Street analysts on average expected revenue of $32.46 billion and EPS of $1.29.