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Will Verizon's (VZ) FiOS Gain Popularity as a Prepaid Plan?
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Soon after the launch of its unlimited data plans for postpaid subscribers last month, U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) is working toward setting another milestone. As per a recent FierceTelecom report, Verizon has decided to offer its Fiber Optic Service or FiOS as a prepaid plan called FiOS Prepaid.
Verizon FiOS is basically a bundled service that includes access to Internet, telephone and television over a fiber-optic communications network with over five million customers in nine U.S. states. Verizon’s FiOS Prepaid comes in the form of contract-free and credit-check-free or deposit-free means to avail the trio of Verizon’s FiOS services. This is the first ‘triple-play’ prepaid Fios option from Verizon, and gives regular service with less restrictions to those who can’t or won’t get it. The service is likely to be available anywhere the regular FiOS plans are offered.
However, FiOS service isn't available nationwide yet. It's available only in select markets along the East Coast, specifically New York, Philadelphia, New Jersey, Rhode Island and Delaware as well as the DC Metro area and around Boston.
FiOS Prepaid Plans
The prepaid subscription will start at $60 per month including a Wi-Fi router, which gives access to 25Mbps Internet service. Customers can also add TV and voice. The inclusion will cost $40–$50 a month for 155 TV channels, $40 for 200 channels (including 35 HD Spanish-language stations) and $10 a month for the basic phone service.
Verizon will also offer three main triple play bundles on a monthly basis: Internet + TV + Voice for $110–$120, Internet + TV for $100–$110, and Internet + Voice for $70. The company will also charge an installation fee of $90. However, a free self-installation option will also be available.
The services are actually not cheap but their best part is flexible availability. It does not require credit check or credit card, signing of contracts or separate purchase of equipment.
Winding Up
Verizon’s FiOS services are doing considerably well as evident from the last reported results. At the end of 2016, FiOS video subscriber base was 4.694 million (up 1.3% year over year), FiOS Internet subscriber count was 5.653 million (up 4.3%) and FiOS digital voice residence connections totaled 3.895 million (up 0.6%). During the quarter, Verizon gained 21,000 FiOS video subscribers, 68,000 FiOS Internet customers and 13,000 FiOS digital voice residential connections.
Inspite of such growth, reports state that the said subscriber count could not meet analyst expectations. Wall Street analysts expected Verizon to add 83,000 FiOS Internet and 31,000 video subscribers.
Hence, the new prepaid option is nothing but a promotional scheme to lure more customers by making FiOS attractive. This aggressive push for new subscribers may be Verizon's way of laying the groundwork for its next-generation Fios IPTV service.
On the flip side, Verizon may be trying to stay competitive by marketing a prepaid service. With the major players of the cable industry such as Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) pulling off subscribers, and increasing pressure from online streaming video providers such as Netfix (NFLX - Free Report) , the telco needs something new to stand out in the crowd. Until Verizon's IPTV offering goes live, a prepaid service may be the best available option.
The price performance of the stock is depressing. Over the past three months, the stock lost 2.13% compared with the Zacks categorized Wireless National industry’s growth of 1.57%.
We look forward to seeing how this new prepaid offering influence the stock’s price performance, growth and financials, especially subscriber count in the first-quarter 2017 and also in the future.
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Will Verizon's (VZ) FiOS Gain Popularity as a Prepaid Plan?
Soon after the launch of its unlimited data plans for postpaid subscribers last month, U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) is working toward setting another milestone. As per a recent FierceTelecom report, Verizon has decided to offer its Fiber Optic Service or FiOS as a prepaid plan called FiOS Prepaid.
Verizon FiOS is basically a bundled service that includes access to Internet, telephone and television over a fiber-optic communications network with over five million customers in nine U.S. states. Verizon’s FiOS Prepaid comes in the form of contract-free and credit-check-free or deposit-free means to avail the trio of Verizon’s FiOS services. This is the first ‘triple-play’ prepaid Fios option from Verizon, and gives regular service with less restrictions to those who can’t or won’t get it. The service is likely to be available anywhere the regular FiOS plans are offered.
However, FiOS service isn't available nationwide yet. It's available only in select markets along the East Coast, specifically New York, Philadelphia, New Jersey, Rhode Island and Delaware as well as the DC Metro area and around Boston.
FiOS Prepaid Plans
The prepaid subscription will start at $60 per month including a Wi-Fi router, which gives access to 25Mbps Internet service. Customers can also add TV and voice. The inclusion will cost $40–$50 a month for 155 TV channels, $40 for 200 channels (including 35 HD Spanish-language stations) and $10 a month for the basic phone service.
Verizon will also offer three main triple play bundles on a monthly basis: Internet + TV + Voice for $110–$120, Internet + TV for $100–$110, and Internet + Voice for $70. The company will also charge an installation fee of $90. However, a free self-installation option will also be available.
The services are actually not cheap but their best part is flexible availability. It does not require credit check or credit card, signing of contracts or separate purchase of equipment.
Winding Up
Verizon’s FiOS services are doing considerably well as evident from the last reported results. At the end of 2016, FiOS video subscriber base was 4.694 million (up 1.3% year over year), FiOS Internet subscriber count was 5.653 million (up 4.3%) and FiOS digital voice residence connections totaled 3.895 million (up 0.6%). During the quarter, Verizon gained 21,000 FiOS video subscribers, 68,000 FiOS Internet customers and 13,000 FiOS digital voice residential connections.
Inspite of such growth, reports state that the said subscriber count could not meet analyst expectations. Wall Street analysts expected Verizon to add 83,000 FiOS Internet and 31,000 video subscribers.
Hence, the new prepaid option is nothing but a promotional scheme to lure more customers by making FiOS attractive. This aggressive push for new subscribers may be Verizon's way of laying the groundwork for its next-generation Fios IPTV service.
On the flip side, Verizon may be trying to stay competitive by marketing a prepaid service. With the major players of the cable industry such as Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) pulling off subscribers, and increasing pressure from online streaming video providers such as Netfix (NFLX - Free Report) , the telco needs something new to stand out in the crowd. Until Verizon's IPTV offering goes live, a prepaid service may be the best available option.
The price performance of the stock is depressing. Over the past three months, the stock lost 2.13% compared with the Zacks categorized Wireless National industry’s growth of 1.57%.
We look forward to seeing how this new prepaid offering influence the stock’s price performance, growth and financials, especially subscriber count in the first-quarter 2017 and also in the future.
Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>