Strategy Analytics: Verizon FiOS poised for continued growth in 2012

Verizon (NYSE: VZ) may have begun to wind down its FiOS rollout, but in the first quarter of 2012 the service provider saw an uptick in both subscribers and its average revenue per user (ARPU).

During Q1 2012, Verizon added a total of 104,000 broadband subscribers, reaching almost 8.8 million in the quarter. It also added 108,000 new FiOS TV customers, ending the quarter with a total of 4.35 million subscribers.

FiOS continues to be one of the telco's wireline growth engines, representing 63 percent of its consumer wireline revenues in Q1 2012.

Growth of FiOS has gotten the attention of Strategy Analytics, which argued in its latest Service Provider Quarterly Recap and Guidance: Verizon CYQ1'12 report that the telco's Q1 performance will set the stage for further FiOS growth in 2012.

The analyst firm forecasted that Verizon's FiOS broadband subscribers will surpass the 5.6 million mark by year's end. Likewise, the growth of the FiOS TV business will result in almost five million subscribers by the end of the year.

Jason Blackwell, director of Service Provider Strategies (SPS) at Strategy Analytics, said: "Over the coming months, the company is going to shift from an expansion strategy to work even harder on converting customers in its existing footprint to FiOS Broadband and TV services."

Already, the telco has been vocal about driving more of its DSL customers to FiOS.

Fran Shammo, CFO at Verizon, said during the company's Q1 earnings call that it plans to drive three initiatives with FiOS: increasing ARPU, increasing service costs, and rebundling products. He added that it would try to find ways to get customers off copper-based DSL and onto FiOS where possible, saying it was "better for us long-term."

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