Wireless and data save Verizon, but it feels the lack of an iPhone
Published: 27 October, 2009
READ MORE: Financial | US | Verizon | Handset | LTE
Verizon Communications' third quarter net income slumped from $3.2bn a year ago to $2.89bn, as wireline services continued to decline, but the wireless joint venture with Vodafone saw strong growth, despite severe pressure from AT&T's iPhone - for once, publicly acknowledged by Verizon Wireless, which is gearing up to make a serious fightback in the smartphone sector at last.
Over dependent on RIM and Windows Mobile - itself losing ground - Verizon Wireless plans a serious Android push in the coming months, partnering with Motorola and HTC initially and working with Google on own-branded devices for the mass market and to enhance its web services offering.
For the third quarter, Verizon Wireless saw its subscriber base increase 25.7% year-on-year to 89m, while wireless revenues were up 24.4% to $15.8bn, and service revenues up 23.7% to $13.5bn. Mobile data was buoyant, up 48.1% to $4.1bn - data now represents 30.5% of the cellco's total service sales. Total ARPU decreased 2.2% but the importance of data was highlighted, as data ARPU rose 17.2% to $15.59. Total churn was 1.49% and retail postpaid churn 1.13%, both figures slightly up on the year earlier and on Q209.
The quarter was strong overall but did highlight the relative weakness in smartphone contracts, compared to AT&T, which boasted a larger number of net additions (2m versus Verizon Wireless' 1.2m) when it announced its own Q3 last week. The Verizon figure was also weaker than 2.1m net adds a year earlier.
The quarter was strong overall but did highlight the relative weakness in smartphone contracts, compared to AT&T, which boasted a larger number of net additions (2m versus Verizon Wireless' 1.2m) when it announced its own Q3 last week. However, Verizon Wireless had a higher data revenue figure (AT&T's were $2.6bn) despite the 'iPhone factor', as the GSM carrier became more aggressive on rates, and with the data boosting qualities of Verizon's BlackBerry range. Verizon said that 'integrated devices' now make up 23% of its customer base and it will introduce 12 high end phones this quarter, including the Motorola Droid, HTC Predator, and BlackBerry Storm2. It also expects further growth netbooks and the MiFi portable hotspot.
Verizon CEO Ivan Seidenberg acknowledged the importance of the iPhone and took a more conciliatory tone towards Apple than he has recently - the past weeks have been characterized by an increasingly aggressive attitude to Apple and AT&T, with the Google alliance and a series of attacks on the problems with the AT&T network. "We would be interested in some point in the future and they have thought it would be interesting to have us as a partner," Seidenberg said, but with no further details. Some think any deal will be far off, perhaps for LTE.
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