Alan Weissberger

Verizon Close to Launching a Video Streaming Service with Redbox; More than 250M covered by VZW LTE Network

In its third-quarter financial report, Verizon Communications profit margins grew as it added 136,000 FiOS broadband customers and 119,000 FiOS TV subscribers — about the same as in the prior quarter.   More importantly,  Chief Financial Officer Fran Shammo said the giant telco was “very close to launching” its video-streaming service with Redbox this quarter.

Majority owned Verizon Wireless (VZW*) sold 3.4m Android phones and 3.1m iPhones in the third quarter.  VZW added 1.54 million net contract customers in the quarter, beating the 901,000 estimate by analysts. More than 250m people are  now covered by VZW’s  LTE network.

“The subscriber number beat the highest estimate on the street,” said Kevin Roe, an analyst with Roe Equity Research in New York. “Part of that was from tablets, and I also think the T-Mobile trend of losing significant customers continues.”

* Verizon owns 55% of VZW;  Vodafone owns 45%

Growth in Verizon’s FiOS video business continued to slow.  Subscriptions rose just 2.7% vs Q2 to 4.6M. The increase of 119,000 customers fell short of Wall Street’s expectation for 142,000. The company’s FiOS broadband unit had nearly 5.3M customers at the end of the quarter- an increase of +136,000 vs the Wall Street consensus forecast of +165,000.

“The read-across for cable and satellite incumbents is self-evidently positive:  lower growth for FiOS means smaller losses for their competitors,” Bernstein Research’s Craig Moffett said.

Infonetics analyst Julien Blin wrote in an email:

“The expected launch of Verizon’s VOD streaming service with physical DVD delivery in 4Q12 through Verizon stores and Redbox kiosks, along with a continued push of its video aggregation engine Viewdini and other upcoming multi-screen offerings, should make Verizon’s video offering more appealing, put pressure on competing services (e.g. Netflix, Amazon Instant Video..) and be another key driver for Verizon’s future top line growth. We also expect Verizon to roll out advanced hybrid video gateways in the coming quarters which should help further improve the multiscreen experience. All this should help drive the growing popularity of FiOS in the coming quarters.”


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Author Alan Weissberger

By Alan Weissberger

Alan Weissberger is a renowned researcher in the telecommunications field. Having consulted for telcos, equipment manufacturers, semiconductor companies, large end users, venture capitalists and market research firms, we are fortunate to have his critical eye examining new technologies.

4 replies on “Verizon Close to Launching a Video Streaming Service with Redbox; More than 250M covered by VZW LTE Network”

Thanks Alan for reporting on Verizon’s earnings and where they stand with their Redbox streaming and LTE progress. In this video interview filmed late last year, Louisa Shipnuck gave a clue about the infrastructure they were putting together that will be the enabler of the Redbox streaming.

As she points out in the interview, what they are building is independent of network and could ride over their own LTE network, as well as the Verizon FiOS (or their older DSL network). All this points to Verizon truly being a competitor in virtually all geographic markets and not restricted to the RBOC boundaries of the Judge Green era.

Appreciate Alan’s update on Verizon. I also recall watching the youtube video clip that was posted on this site some time ago.
I have held the view for many years that Verizon’s core strategy in building its networks in both FiOS and LTE will pay off for the company. Verizon has generally execxuted on its plans. In my view, AT&T plans and execution make the company a laggard.

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