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Cloud TV coming to Verizon amid better-than-expected earnings

Verizon posted Q4 earnings Tuesday which pushed its total 2013 revenue above analyst expectations. The reason? FiOS bundles that could be getting an extra boost from Verizon's newest acquisition: OnCue Cloud TV.

By Staff writer / January 21, 2014

Verizon Communications Inc. reported higher than expected earnings for 2013, partly due to increased phone, TV, and internet bundles.

John Minchillo/AP/File

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Though AT&T and T-Mobile have been the ones most loudly sniping at each other so far this year, it appears another telecommunications giant may actually be the force to be reckoned with.

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In a release Tuesday, Verizon announced its Q4 2013 earnings and surpassed analyst predictions, earning $7.92 billion (or $1.66 per share) over the last three months. This puts the cap on a year of growth for the wireless company in the increasingly competitive – and lucrative – mobile market. But that’s not all the news the company shared: in a separate release, Verizon announced that it is buying Intel’s cloud-based Internet TV division, a move that could spur increasing growth in its online presence.

"Verizon delivered a total return of 18.6 percent to our shareholders in 2013, while attracting more customers than our competitors and improving our financial performance,” says Verizon chairman and CEO Lowell McAdam in the release. “This included more than 20 percent year-over-year increases in operating cash flow and EPS. In 2014, we look forward to acquiring sole ownership of Verizon Wireless, the best asset in the global wireless industry, and leveraging all our assets to deliver innovative products to customers and more value to shareholders."

Overall in 2013, Verizon made $31.07 billion, beating the analyst prediction of $31.03 billion by $400 million.

This is a major success over Q4 2012, when superstorm Sandy affected revenue. In Q4 2012, Verizon lost $1.93 billion, and overall revenue 3.4 percent less than this year.

What’s the reason for their success? More subscribers, but also higher costs.

Verizon gained 1.6 million subscribers in Q4, with an average account revenue of $157, an increase of 7.1 percent over 2012. However, it appears customers were looking for more than just mobile packages in 2013, as 218,000 of those new subscribers decided on some sort of FiOS bundle, Verizon’s phone, TV, and Internet packages. Overall, FiOS saw a 15.6 percent year over year increase in revenue.

And those customers looking for more than just mobile from their mobile company may be in luck after Verizon’s newest acquisition.

In a separate announcement Tuesday, the telecommunications company says it is acquiring Intel Media from fellow tech company Intel for an undisclosed sum. These assets include the intellectual property rights to Intel’s OnCue Cloud TV, a service that would allow people to watch live TV, recent programming, on-demand content, and other shows in their homes and on mobile devices.

“The transaction will accelerate the availability of next-generation video services, both integrated with Verizon FiOS fiber-optic networks and delivered ‘over the top’ to any device,” the company says in a release.

Whether OnCue will stay true to Intel’s original vision or become a part of FiOS remains to be seen.

The most likely scenario, says CNET reporter Shara Tibken, is that “Verizon uses Intel's technology to offer a true ‘TV anywhere’ product, allowing subscribers to watch live TV from any mobile device no matter where they are. It can also provide the broadband access that powers the service.”

Internally, Intel Media will stay essentially the same. Verizon says the 350 Intel Media employees will “substantially” remain and will be led by the same management team.

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