Verizon CEO disputes DSL seasonality

Despite anticipation among many in the telecom industry of a seasonal uptic in third-quarter DSL penetration, Verizon CEO Ivan Seidenberg today aimed to dispel the notion of seasonal trends in broadband sales.

At a Goldman Sachs investor conference today, Seidenberg was asked about possible saturation of the U.S. broadband market and whether DSL subscriber growth might rebound in the third quarter, following a historical pattern.

“My operating people like to use seasonality as an excuse as to why numbers go down,” Seidenberg said. “There is no seasonality with respect to the market’s acceptance of innovation.”

“Is DSL hitting the point where we’re getting more penetrated, and it’s less effective?” he said. “Of course.”

But with nationwide DSL penetration between 50% and 55% and the penetration of high-definition television at only 20%, Seidenberg said, there’s plenty of room for further broadband gains.

Verizon’s net DSL additions dropped 64% in the second quarter, according to research analysis firm Broadband Trends, and the carrier’s total net broadband additions (including DSL and fiber-to-the-home) dropped 31%. In a report published last month, Broadband Trends principal analyst Teresa Mastrangelo attributed the declines to seasonality, citing less precipitous drops in the second quarters of 2006 and 2005.