Verizon Strike: Carrier Unable to Fill Many New FiOS Orders

Verizon has had to shift its management team to focus on current customer repair and maintenance, and away from new orders and installations.

Edward Gately, Senior News Editor

May 19, 2016

3 Min Read
Verizon Strike: Carrier Unable to Fill Many New FiOS Orders

**Editor’s Note: Click here to view our timeline of events as this strike enters its sixth week.**

Installations and new orders of Verizon FiOS have dropped significantly as the ongoing wireline workers strike moves into its sixth week.

Verizon's Fran ShammoThat’s according to Fran Shammo, Verizon’s chief financial officer, who spoke Thursday during the MoffettNathanson Media & Communications Summit in New York. More than 500 strikers protested outside the conference.

Verizon and leaders from the Communications Workers of America (CWA) and International Brotherhood of Electrical Workers this week returned to the bargaining table with a federal mediator. The parties decided to start talking again after meeting with U.S. Labor Secretary Tom Perez. They agreed to make no public statements about the proceedings during the negotiations.

Shammo said Verizon is cash-neutral at this point, but has had to shift its management team to focus on current customer repair and maintenance, and away from new orders and installations.

“When we do installs for FiOS, there’s a lot of capital labor that goes with that,” he said. “There will be some impact on the wireline margin, and that’s because of the labor costs … instead of capitalizing 50 cents and expensing 50 cents, you’re expensing $1. So it’s just a shift between the two buckets, but it does have a profit-and-loss impact. I would be optimistic if I said we would be net positive for broadband and TV this quarter.”{ad}

The piece of the business that Verizon has lost and will never get back comes from people moving, Shammo said.

“A person moves into a new home, they want service today and you can’t deliver it, and they’re going somewhere else,” he said. “So they’re probably lost for two years.”

As for customers wanting to switch to Verizon FiOS, they “kind of just sit tight and they come back, so it ramps up relatively quickly and we can get back in line when the full force comes back in, so that’s not as big of an issue for us,” Shammo said.

In the meantime, CWA members and supporters in Washington, D.C., marched in front of the White House and rallied across the street in Lafayette Park.

Also Thursday, Congressmen Bobby Scott and Jerrold Nadler, and 86 members of the Congress issued a joint statement urging the parties to negotiate in good faith and agree to a fair contract:

“Verizon workers build, install and maintain the state-of-the-art FiOS broadband system, and ensure that the millions of customers still reliant on the copper network continue to receive high-quality service. In addition, Verizon Wireless retail store workers and technicians work in one of the most profitable sectors of the economy. We are troubled that the lack of a negotiated labor agreement could increase the likelihood that good jobs will be offshored to the Philippines, Mexico and other locations overseas, or outsourced to low-wage, non-union domestic contractors. And we are concerned that Verizon wireless retail workers, who joined the union back in 2014, still have not been able to negotiate improvements in their wages, benefits and working conditions. We hope that Verizon will be committed to hiring and retaining the skilled staff necessary to complete the buildout of its FiOS broadband service in a timely manner in all markets.”

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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