The telecommunication company has successfully managed to keep its user growth intact in comparison to other market leaders.
Verizon’s FIOS Pay TV segment was the best performing service of year 2015. The success of this segment comes from the increased user growth in a time when better and cheaper alternatives were available for the customers. It has been predicted by many that since cheaper streaming media services have entered the market, it is probable that customers will move towards them and will abandon traditional television, but that has not happened yet.
Verizon Communication, Inc. has three major segments, including pay television, broadband and wireless. In 2015, all these segments faced increased challenges but they managed to perform quite well amidst aggressive competition from other pay television and wireless service providers. The telecommunication organization managed to perform well given that T-Mobile and Sprint gave it a tough competition in terms of pricing strategies. However, despite the increased competition it maintained its market share.
Additionally, even though customers have not started abandoning traditional television entirely yet, the cable industry did lose a number of subscribers in the third three quarters 2015. However, the telecommunication giant managed to gain more customers with time. In the first quarter, FIOS gained 57,000 paying users, in the second quarter of 2015, it had 26,000, and finally in the third quarter it got another 24,000 customers, as per the reports by LRG.
The third quarter, with an increase of 24,000 users, was a surprising one as the holding company’s rival AT&T lost over 91,000 customers in that same quarter. This decrease was mainly because AT&T started moving away from its U-verse TV Service and started focusing on DirecTV Satellite service, its newly acquired segment; therefore, it reported its worst performing quarter.
This was highly surprising as Verizon gained customers in the quarter in which most of the rivals lost their viewer users. People are still to find out as to why it added more customers to its traditional television service at a time when the industry is shrinking. However, it was always easy for the company to attract users mainly because it had flexible packages in comparison to its rivals.
Fran Shammo, the chief financial officer of Verizon, stated that they continue to see interest amongst its users since it offers more choice and control to the viewers at a lower price. He added that it might lead to a pressure in the revenue growth but could be beneficial for the contribution margin. There is a greater chance that cord-cutters will increase in 2016, even though it managed to continue its user growth in 2015, the current year could be a lot different.
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