193,000 FiOS (Fiber Optic Service) Internet and 180,000 FiOS Video net additions, with increased sales penetration for both products; net increase of 104,000 broadband connections from 4Q 2011; FiOS Internet customers now total more than 5 million.
8.1 percent year-over-year increase in consumer ARPU; 63 percent of consumer revenues generated by FiOS.
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FiOS Continues to Add Customers, Increase Sales Penetration
In first-quarter 2012 in the Wireline segment, continued strong demand for FiOS services led to revenue growth generated by U.S. consumer wireline customers and continued gains in FiOS sales penetration.
Globally, continued strong sales of strategic services helped mitigate lower revenues resulting from Verizon’s
targeted efforts to eliminate products that do not meet the company’s profitability requirements, and continued secular pressures in wholesale.
Wireline Financial Highlights
> First-quarter 2012 operating revenues were $9.9 billion, a decline of 2.0 percent compared with first-quarter 2011. Wireline operating income margin was 1.6 percent, compared with 2.8 percent in first-quarter 2011, and Segment EBITDA margin (non-GAA P) was 22.6 percent, compared with 23.6 percent
in first-quarter 2011.
> Consumer revenues grew 1.7 percent compared with first-quarter 2011. Consumer AR PU for wireline services was $97.88 in first-quarter 2012, up 8.1 percent compared with first-quarter 2011. AR PU for FiOS customers continued to total more than $148 in first-quarter 2012. FiOS services to consumer retail customers represented 63 percent of consumer wireline revenues in first quarter 2012.
> Global enterprise revenues totaled $3.9 billion in the quarter, up 0.9 percent compared with first-quarter 2011. Sales of strategic services — including Terremark cloud services, security and IT solutions, and strategic networking — increased 11.6 percent compared with first-quarter 2011 and represented
51 percent of global enterprise revenues in first-quarter 2012.
Wireline Operational Highlights
> Verizon added 193,000 net new FiOS Internet connections and 180,000 net new FiOS Video connections in first-quarter 2012. Verizon had a total of 5.0 million FiOS Internet and 4.4 million FiOS Video connections at the end of the quarter.
> FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 36.4 percent at the end of first-quarter 2012, compared with 33.1 percent at the end of first-quarter 2011. In the same periods, FiOS Video penetration was 32.3 percent, compared with
29.1 percent.
> Broadband connections totaled 8.8 million at the end of first-quarter 2012, a 3.3 percent year-over-year increase. The net increase of 104,000 broadband connections from fourth-quarter 2011 was the highest quarterly net-add total since second-quarter 2009.
> Verizon continued to expand its next-generation 100 gigabit-per-second network, enabling several more network routes in the U.S. and two additional routes in Europe.
> The company also took advantage of the fully activated Europe India Gateway submarine cable system. The 15,000 kilometer high-bandwidth optical system, with a design capacity of 3.84 terabits per second, provides much needed diversity for future Internet, e-commerce, data, video and voice services from the United Kingdom to India.
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