• by David Goetzl , July 31, 2007

Verizon said Monday that its telcoTV offering saw distribution increase by nearly 50% in the second quarter--a pace that could make its subscriber base as large as some of the top-10 cable operators by September.

The telecom giant reports it now has 515,000 subscribers to the FiOS TV service--the subject of heavy marketing in the New York area, where it has made some inroads in battling Cablevision for customers--up from 348,000 at the end of March.

If Verizon experiences another 50% jump in the third quarter, its then-nearly 775,000 customers would give it all but nine MSOs.

Also striking is Verizon's report that some 13% of the 3.9 million potential subscribers to the service have signed up--a penetration rate that pales beside the 1% that AT&T reported last week for its similar service, which is in some 4 million homes. AT&T, however, has not mounted a marketing effort to match Verizon's intensity.

"We are building very positive momentum in FiOS, and we have many growth opportunities ahead of us," said Verizon CFO Doreen Toben on a conference call to discuss the company's overall second-quarter results.

AT&T did say last week that it will continue to ramp up its rollout, notably expanding into new markets in the Southeast by year-end for its U-verse service.

While Cablevision has acknowledged Verizon's ability to peel away some of its customers, most leading MSOs have dismissed any threat posed by the telcos.