Verizon saw its FiOS video subscribers growth remain stunted in the first quarter, adding just 36,000 new customers and lending weight to rumors that the company may be looking to exit the traditional pay-TV market to focus on an Internet and mobile play instead.
The company reported EPS of $1.06, in line with Wall Street expectations, but missed expected revenues by $320 million, coming in at $32.17 billion.
It was the second consecutive quarter of small pay-TV gains. In Q4 it added just 20,000 FiOS TV subs. A year ago it added 90,000.
The company added 96,000 Internet customers in the quarter, more than double the 41,000 it added a year ago.
Earlier this week, Bloomberg reported that Verizon was in the process of changing its video strategy to one that focuses on Internet-delivered TV, being driven there by rising programming fees, technology that isn’t up to date and an end to the rapid network expansion is enjoyed during its early years .
“The model is shifting rapidly,” Tami Erwin, Verizon’s SVP of consumer products, told Bloomberg. Verizon plans to leverage the technology its acquired in recent years, buying up a slew of technology companies under the umbrella of Verizon Digital Media Services.
Just as likely, though, is a bigger push into a mobile video play.
The company has been aggressively banking content from multiple providers and recently announced plans to expand its video platform by adding Millennial-focused content from Hearst and AwesomenessTV, and through a joint venture with Hearst to acquire Complex Media.
Verizon has been working hard to strengthen its networks, announcing its intention to acquire XO Communications’ fiber-optic network business and an agreement to deploy a new fiber platform in Boston. Both will support a mix of new technologies, including 5G wireless services.
Verizon also completed its sale of local landline businesses in California, Florida and Texas on April 1. The company used the proceeds to pay down debt in second-quarter 2016.