Verizon's 4G, iPhone Q4 Activations Soar

By Joseph Palenchar -- TWICE, 1/24/2012

Bedminster, N.J. - Verizon's activations of 4G devices and Apple iPhones soared in the fourth quarter to 2.3 million and 4.3 million, respectively, with iPhone sales more than doubling from the third quarter's 2 million.

Activations of 4G devices, consisting of smartphones and data devices, rose to an all-time quarterly high of 2.3 million from the third quarter's 1.4 million, said Verizon CFO Fran Shammo during an earnings conference call. The fourth-quarter number combines 1.6 million 4G smartphones and 700,000 4G data devices.

4G service launched in eight markets in December 2010 and now reaches 195 markets with a population of 200 million people. 4G coverage will expand to match the carrier's 3G footprint by mid 2013, sooner than the originally planned year-end 2013 timetable, Shammo said.

Overall 3G and 4G smartphone activations hit 7.7 million in the quarter, marking the carrier's best quarter ever for smartphone activations, Shammo said. Smartphone activations rose from the third quarter's 5.6 million to put the carriers' installed base of retail-postpaid smartphone subscribers at 44 percent of the company's total postpaid subscriber base. That's up from 39 percent at the end of the third quarter and from 28 percent in the fourth quarter of 2010.

A total of 70 percent of retail postpaid phones sold in the quarter were smartphones, up from 60 percent in the previous two quarters, Shammo said.

For the full year, the carrier activated almost 15 million Android-based smartphones and 10.8 million iPhones. The number of BlackBerry and Windows Phones activations wasn't disclosed.

The quarter's iPhone activations were up from 2 million in the third quarter, 2.3 million in the second quarter, and 2.2 million in the first quarter, when the phone first hit the market.

In other financial disclosures, Verizon said total new net additions (including wholesale and machine-machine devices) slipped 15.1 percent to 969,000, largely due to the loss of telematics subscribers, but the carrier posted its largest increase in retail subscribers (combining postpaid and prepaid retail subscribers) at 1.46 million, up 81.7 percent from a year-ago. Of those, 1.2 million were postpaid customers, and 252,000 were prepaid customers.

The retail prepaid gain marked the first increase in prepaid net adds in two years, largely due to a new $50 unlimited prepaid plan launched last September, Shammo said.

Verizon also reported that:

--it ended 2011 with 108.7 million net connections, up 6.3 percent from year-end 2010. Of that amount, 92.2 million were retail postpaid and prepaid subscribers, and 16.5 million were wholesale connections and other connections such as machine-to-machine subscriptions.

--total wireless operating revenues rose 13 percent in the quarter to $18.3 billion and for the year by 10.6 percent to $70.2 billion.

--wireless operating income fell 10.7 percent to $4.3 billion in the quarter and by 1.1 percent for the year to $18.5 billion.

--operating income margin slipped in the quarter to 23.7 percent from the year-ago quarter's 30.1 percent and slipped for the year to 26.4 percent from a year-ago 29.5 percent.