Back to top

Analyst Blog

Leading U.S. carrier, Verizon Communications Inc. (VZ - Analyst Report) has launched Quantum fiber-optic service, an Internet service through its FiOS cable network. The new service outpaced the Internet speed of MSO Comcast Corp. (CMCSA - Analyst Report).

The telecom giant is offering speeds up to 500 MB per second, just behind Google Inc.’s 1 GB speed but well ahead of Comcast’s 305 MB downloading speed.

Since yesterday, the Quantum fiber-optic service is available across all FiOS markets at a price of $309.99 for a double-play service of Internet, TV or telephone. In case of a triple-play service (inclusive of video, Internet and voice), the subscriber has to pay $329.99. However, Comcast’s Internet service is slightly cheaper than the Quantum fiber-optic service, costing $299.95 per month.

Similarly, Google Fiber service starts at $70 a month. The service is already available in Kansas City, Missouri and is expected to be launched in Austin, Texas, and Provo, Utah, by the end of 2013.

Recently, Verizon reported second-quarter 2013 financial results where its bottom line was in line with the Zacks Consensus Estimate but the top line missed the same. During the quarter, Verizon added 140,000 and 161,000 customers to its FiOS Video and FiOS Internet services, respectively.

Verizon exited the quarter with 5.0 million (up 12.6% year over year) FiOS Video customers and 5.8 million (up 12.2%) FiOS Internet subscribers. The penetration rate (subscribers as a percentage of potential subscribers) of both FiOS Internet and FiOS Video increased to approximately 34.5% and 38.6%, across all markets from the year-ago levels of 32.6% and 36.6%, respectively.

Hence, we believe that the launch of the new service will not only drive Verizon’s FiOS business but will also help the company to consolidate its position in the U.S. telecom market against leading players like AT&T, Inc. (T - Analyst Report), Sprint and T-Mobile US.

Currently, Verizon has a Zacks Rank #3 (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
THE PANTRY… PTRY 21.27 +3.30%
ERBA DIAGNO… ERB 2.99 +2.75%
WILLDAN GRO… WLDN 11.76 +2.08%
SANCHEZ ENE… SN 33.98 +2.07%
INTEL CP INTC 35.13 +1.74%