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Verizon Communications, the second-largest US telecommunications group, is signing up customers for its new fibre-optic based consumer broadband and TV service at the rate of 2,200 per day, helping to offset the fall in traditional phone customers.

Verizon launched the high-speed fibre network in late 2005, but started its marketing push only six months ago. Analysts said Monday’s subscriber numbers indicated the strategy was beginning to work.

Verizon believes its “triple play” bundle of voice, video and data delivered over the network, dubbed FiOS, enables it better to compete against its cable TV rivals.

New York-based Verizon signed up 141,000 customers in the first quarter, about 750 more per day than during the previous quarter, and ended the period with 348,000 subscribers. In addition, Verizon now has about 618,000 satellite TV customers through its partnership with DirectTV, the US satellite TV operator.

Like its rival, AT&T, Verizon has been investing heavily in new high-speed fibre-optic networks, as well as mobile services, in an effort to offset traditional residential line losses.

In the latest quarter, the cost of deploying FiOS services diluted earnings by 11 cents per share. But most analysts have said the investment, while costly, is necessary if Verizon is to offset a decline in traditional phone subscribers and maintain its growth. Verizon lost 408,000 primary residential access lines during the quarter, a fall of 8 per cent. to 44.2m lines.

Traditional telecom consumer market revenues fell by 3.5 per cent to $4.2bn. Overall, data revenues across all markets increased by 12.2 per cent to $4.2bn, reflecting increasing revenues for consumer broadband services.

Accelerating video and wireless growth underpinned Verizon’s strong first-quarter results.

Total operating earnings, excluding divested operations, grew by 20 per cent to $3.8bn on operating revenues that increased 6 per cent to $22.6bn. Reflecting the divestitures, net earnings fell to $1.5bn or 51 cents a share, compared with 56 cents a share a year earlier.

The latest results highlight the importance of Verizon Wireless, a 55 per cent-owned joint venture with the UK’s Vodafone.

Copyright The Financial Times Limited 2017. All rights reserved.
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