Verizon’s latest earnings report indicates that the company’s growth in wireless, wireline broadband, and television services continues to slow down, again highlighting why the company is pushing hard into advertising to Millennials. Verizon’s first quarter earnings indicate Verizon Wireless added 640,000 new subscribers, though the lion’s share of these remain tablet customers signing up for discounted promotions.
On wireline, things were notably less rosy, with the company seeing a 10,000 net loss in overall broadband subscribers thanks to the continued defection of unwanted DSL customers, and only marginal efforts to expand the FiOS footprint.
Verizon added 98,000 FiOS broadband customers during the quarter (down 26.3% from this period last year), but lost 108,000 DSL customers during the same period. The company did add 36,000 new FiOS video subscribers during the first quarter, though this was a 60% reduction in growth year over year. The slow video growth came on the heels of the fourth quarter’s addition of just 20,000 video subs, Verizon’s worst performance since it got into the TV business back in 2006.
Granted with consumer paying more money than ever for capped wireless data, and limited competition on the fixed-line broadband front, Verizon’s certainly still more than profitable. The company earned $4.4 billion on overall revenues of $32.2 billion.
But with Wall Street only interested in quarter over quarter growth at any cost, Verizon has begun pushing hard into the advertising and content business. That includes the company’s $4.4 billion acquisition of AOL, its continued pursuit of Yahoo, the development of stealth wireless tracking ad technology, and the launch of the company’s Go90 Millennial-focused video service.
Verizon did note on its conference call with the media and analysts that the company’s ongoing strike by union workers could notably impact this current quarter’s revenues.
“Verizon continues to expect full-year 2016 adjusted earnings to be at a level comparable to the company s strong full-year 2015 adjusted earnings, Verizon said in a statement. However, given the status of labor contract negotiations, there will be pressure on second-quarter earnings due to the timing of cost reductions.”