Verizon Communications raised its capital spending estimates for the year to address better-than-expected growth in wireless and ongoing efforts to deploy fiber-to-the-premises (FTTP), the company announced in its second-quarter earnings call Tuesday.

While Verizon had earlier predicted it would increase its capital expenditures 10% this year from the $13.26 billion it spent in 2004, the company now believes the increase will be more like 15%, due to the recent surge of new subscribers in its wireless business and the requirements of its FTTP initiative. According to Chief Financial Officer Doreen Toben, the increase stems less from FTTP and more from the wireless side, where a spike in gross and net subscribers in the second quarter will force the company to add capacity to its network. Verizon now expects its 2005 capital expenditures to be in the range of $15.25 billion.

Though the company said it is on track to meet its goal of passing 3 million total homes with FTTP by the end of the year, not all those homes will be able to purchase the service this year, Toben said, noting particular difficulty among multidwelling units, for which Verizon is still testing the relevant technology.

Verizon is currently trialing video services with a few hundred paying customers, Toben said, and will begin selling video service in select markets before the end of the year. The company has so far obtained eight franchise agreements to offer video service over its FTTP network and expects another 15 to be completed soon while it continues to negotiate more than 200 in 13 states. “Texas is a when, not if, situation,” Toben said, regarding pending legislation there to make video franchise agreements easier to attain. But legislation in New Jersey would have to wait until after the November elections there, she added.

The company has now surpassed 4 million total broadband lines, adding 278,000 lines in the second quarter (including both DSL and FTTP), the lowest number since last year’s second quarter. Verizon promised more aggressive marketing of “naked” DSL in the near future to win customers in households with no wireline phones.

“We’re also testing come creative ideas in the area of bundling,” Toben said, “so stay tuned.”

As Verizon drove its penetration of consumer bundles to 60% in the quarter (up from 49% a year earlier), the average revenue per user among residential customers rose $1 sequentially to $51, up more than $3 (or 6.4%) from a year earlier. Residential line loss also increased to 518,000 from 353,000 in the first quarter and 780,000 a year ago.

The company lost a total of 754,000 access lines in the quarter, 18% more than it reported losing a year ago. Of the 116,000 retail business lines lost during the quarter, 86,000 (or nearly three fourths) were dial-up ports, of which very few remain, Toben said. “[Dial-up lines are] just about done.”

Second-quarter revenues from business, residential and wholesale customers were largely unchanged from the previous and year-earlier quarters, though revenue from miscellaneous business segments including logistics declined 6% from the previous year to $700 million. Revenue from enterprise customers grew 1.4% sequentially, though it was down from a year earlier.