Sunday, February 26, 2006

Verizon CFO Says FiOS Plan is on Track

Speaking at the annual Bear Stearns Media Conference, Verizon's CFO Doreen Toben said the company is "rapidly executing" on its integration of operations acquired from MCI, and that the company "continues to see a strong and growing customer response" to fiber-optic-based FiOS data and video product offerings.

Customer take rates for the FiOS services are "well on plan." She noted that deployment costs are declining and that the next-generation fiber network platform is driving innovation for new FiOS TV offerings.

Some highlights of the presentation:

  • FiOS TV has a 23% penetration rate in the town of Keller, Texas. The company is targetting a 25% penetration in all the markets it enters within 5 years or entry.

  • Verizon Wireless is seeing accelerated growth in data services, which accounted for $2.2 billion in 2005 (content, access/email, and messaging).

  • CAPEX for Verizon Wireless is expected to be $6.3 billion for 206, compared to $6.5 billion in 2005.

  • Wireline growth services now total about $11 billion and are increasing at a rate of more than 10 percent year-over-year.

  • Verizon expects 2006 diluted earnings per share before special items such as MCI integration costs (a non-GAAP measure) to be similar to 2005's level of $2.56 per share. Verizon expects 2006 quarterly earnings to increase during the year, with the first quarter estimated to be in the range of 57 cents per share to 59 cents per share.

  • Verizon continues to target the completion of the divestiture of its Verizon Information Services (VIS) unit by the end of this year. In December Verizon had announced that it had begun reviewing strategic alternatives -- including a spin-off, sale or other strategic transaction -- for the domestic operations of the company's wholly owned directories publishing business.

A webcast is available on the Verizon investor website.

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