Mass. SlowdownFor Verizon FiOS

About a week after Verizon
Communications said it was
nearing the end of its $23 billion
FiOS buildout, data from the Massachusetts
Department of Telecommunications
and Cable suggest
consumer uptake of the service
is already slowing considerably.

The Massachusetts DTC — the
only state regulatory body in the
U.S. that releases detailed city - by-
city cable, satellite and telco
video-subscriber data to the public
— is an often-cited basis for nationwide
telco video-subscriber

Sanford Bernstein cable and satellite
analyst Craig Moffett spotted
three key points in the DTC data:
new potential subscribers passed
by FiOS plant slowed in 2009; net
FiOS subscriber growth slowed;
and cable’s competitive losses to
FiOS moderated.

According to the data, FiOS subscriber
additions were down sharply
in 2009 — 66,000 versus 81,000 in
2008. Comcast, the dominant cable
operator in the state, lost about
29,000 subscribers in the Bay State
during the year, a 1.8% decrease.

The gap between FiOS gains and
Comcast losses are largely attributed
to satellite TV providers, Moffett
concluded. He estimated satellite
sales accounted for as much as 42%
of FiOS gains.

“Broadly speaking, the results confirm
our expectation that Verizon’s
video gains likely peaked in 2009 and
are set for a modest decline in 2010
and a sharper drop thereafter, due to
declining incremental passings and
the front-end loaded nature of FiOS
penetration,” Moffett wrote.

“Conversely, we expect the cable
industry’s competitive subscriber
losses to moderate progressively

Verizon disclosed late last month
that it would focus on building out
the communities where it already
has franchises.