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Verizon Teams Up with SES, 4K Content for FiOS TV Customers

Zacks Equity Research

As per a recent FierceCable report, U.S. telecom behemoth Verizon Communications Inc. VZ has collaborated with Luxembourg-based satellite operator, SES, to test the latter’s Ultra High Definition (UHD) platform in order to deliver 4K content to its FiOS customers.  As part of the trial, SES will deliver nine 4K channels to Verizon’s FiOS users: Fashion One 4K, Insight, Travelxp 4K, Nature Relaxation, C4K360, 4K Universe, UHD1, SES Demo Channel, and NASA TV UHD.

The trial will eventually help Verizon offer the next generation of HD programming to FiOS TV customers throughout the U.S. and prepare for a wider 4K rollout in the near future.

Reports also give us a sneak-peek about the launch of a new internet-based set-top box later this year, for the company’s 4.5 million subscribers to better enjoy 4K content.

Moreover, Verizon’s FiOS' fiber network, with its adequate bandwidth, is apt for delivering 4K UHD to its customers. The collaborative agreement between SES and Verizon marks an important milestone in the development of Ultra HD solution.

SES currently has trial agreements for its managed Ultra HD platform with Frontier Communications Corp. FTR. Verizon’s FiOS TV rival—AT&T Inc.’s T DIRECTV is also well positioned, through their satellite delivered service. DIRECTV has already started delivering limited 4K contents.

Meanwhile, on Mar 13, Verizon Communications faced a legal notice from the city of New York in relation to its FiOS rollout in the city. The company was accused of failing to meet the 3.3 million estimated services as committed in 2008.

We hope Verizon will easily recover from its FiOS litigations in NYC. As a recovery to the loss, the company has assured completion of FiOS expansion to the city's remaining 1 million households over the next year. For this, the company will spend an additional $1 billion. So far, Verizon has spent $3.7 billion to deploy FiOS in New York City.

We further look forward to seeing how this new offering of 4K channels to FiOS customers through a UHD trial along with FiOS’ prepaid plans and free mobile data offering influence the stock’s price performance, growth and financials (especially subscriber count) in the ongoing first quarter of 2017 and also in the future.

The price performance of the stock is depressing. Over the past three months, the stock lost 8.0% compared with the Zacks categorized Wireless National industry’s decline of 3.1%.

Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Events

Recently, both Verizon Communications and AT&T have decided to suspend their marketing campaign on Google’s YouTube site because of the appearance of their ads alongside offensive and highly controversial videos promoting adult contents, terrorism and hate speeches. Notably, Google is a division of Alphabet Inc. GOOGL.

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