Verizon Reports Continued Strong Growth in 1Q 2008

263,000 net new FiOS TV customers and 262,000 net new FiOS Internet customers, for a total of 1.2 million FiOS TV customers and 1.8 million FiOS Internet customers; 8.5 million total broadband customers, up 14.9 percent

Verizon Communications Inc. (NYSE:VZ) today reported another quarter of strong sales and operational results.

Another Quarter of Strong Growth in FiOS, Strategic Services

Verizon’s Wireline business, which consists of Verizon Telecom and Verizon Business, reported continued strong growth in FiOS customers and in sales of enterprise strategic services. Results through the first quarter 2008 include operations in Maine, New Hampshire and Vermont that were spun off to Verizon shareholders and merged into FairPoint Communications Inc. on the final day of the quarter. In the first quarter:

• Verizon added a net of 263,000 new FiOS TV customers. The company had 1.2 million FiOS TV customers in total as of the end of the quarter, having added more than 850,000 FiOS TV customers since the end of the first quarter 2007.
• Verizon added a net of 266,000 new broadband connections — 262,000 from FiOS Internet service. Total broadband connections were 8.5 million (6.7 million DSL-based Verizon High Speed Internet connections and 1.8 million FiOS Internet connections), an increase of 14.9 percent compared with the first quarter 2007.
• Broadband and video revenues from consumer and small-business customers topped $1 billion, representing year-over-year quarterly growth of nearly 50 percent (56 percent growth in the consumer segment of broadband and video customers).
• Growing revenue from broadband and video services drove consumer ARPU in legacy Verizon wireline markets (which excludes consumer markets served by the former MCI) to $61.02, a 9.6 percent increase compared with last year’s first quarter. The ARPU among FiOS customers was approximately $129 per month.
• Wireline data revenues — which now represent nearly 40 percent of total wireline revenues — were $4.9 billion, an increase of 14.8 percent compared with the first quarter 2007. This includes revenues from consumer broadband services, and revenues from wholesale data transport and sales of Verizon Business data services.
• Verizon Business had revenues of $5.2 billion, or growth of 0.4 percent compared with last year’s first quarter. This is Verizon Business’ sixth consecutive quarter of year-over-year, pro-forma revenue growth (non-GAAP, calculated as if Verizon and MCI had merged on Jan. 1, 2005). Global enterprise revenue, representing retail sales, increased 2.0 percent to $3.9 billion, compared with last year’s first quarter.
• Strong sales of key strategic services — such as IP (Internet protocol), managed services, Ethernet and optical ring services — continued to drive Verizon Business’ growth. These services generated $1.4 billion in revenue, up 23.5 percent from last year’s first quarter.

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