FiOS Does Not Sell Itself

Even FiOS Doesn't Sell Itself

Verizon's third quarter FiOS revenues totaled more than $1.4 billion, up 56 percent year over year. And FiOS average revenue per user also hit more than $137 per month.

Verizon also added about 18 percent more FiOS TV and Internet customers than in the same quarter last year, including 191,000 FiOS TV and 198,000 FiOS Internet customers, increasing Verizon's penetration to 25 percent for TV and 29 percent for Internet.

Still, net adds were less than the record adds of the last two quarters, Verizon says. Gross sales were lower primarily due to a change in promotional activity, the company says.

"As it turns out, we had a couple of promotions that worked, didn't work as well," says Ivan Seidenberg, Verizon CEO. "What happened is we had a couple of better quarters and we toyed with how we could sustain that and found that it was difficult in light of maintaining a fiscal discipline against it."

In other words, Verizon probably did not spend as much as it could have on marketing FiOS services, and the results probably slowed because of that conservatism.

The point, perhaps, is that as powerful a marketing platform as FiOS represents, the value proposition appears to remain less obvious to consumers than we inside the business sometimes think.

Verizon remains committed to adding about one million new FiOS customers every year, on a base of homes passed that stands at about 45 percent of all Verizon residential passings, with video available to about 34 percent of total households passed.

That illustrates part of the problem. Whatever Verizon does, it potentially can sell video services to about a third of all residences, though it can sell FiOS broadband to about 45 percent of homes. It always is tough to market services when a third of homes can buy them, not all.

And as service providers have learned in the past, easing up on promotions, or banking on the wrong promotions, can have significant effect on results. Not even fiber-to-the-home service, in and of itself, seems to "sell itself" to most customers, as powerful as those sorts of connections always have seemed to people in the business.