As Verizon Wireless (VZ)(VOD) Does Well, Does Sprint (S) Do Poorly?

Investing

Published: June 10, 2008 3:16 pm

Verizon (VZ) had two piece of news for investors today. The first is that it fiber-to-the-home cable killer, FiOS is being built out faster than expected. All 18 million of the homes it passes should have access to the system by the end of 2010. That may be bad news for cable companies like Comcast (CMCSA) and Time Warner Cable (TWC), but that won’t be known until it is clear that consumers are moving to FiOS in large numbers.

Verizon also said its wirelress business is not being hurt by the economy. It does not fear the Apple (AAPL) iPhone which is marketed by rival AT&T (T). On the contrary, it is still adding customers, especially at the most expensive levels of its subscriber plans, those that cost $99.99 or more a month. According to Reuters, Verizon’s president said "I can tell you today that at the high end we are experiencing a quadrupling of the gross adds that we have seen, and a reduction in the churn rate at the high end. So we don’t think that plan was at all a price war."

The overall cellular market in the US is not growing fast enough to account for that rise in business, so the new customers have to be coming from somewhere. Based on past experience, these are people moving over from Sprint (S).

Douglas A. McIntyre

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