– Data delivers, according to Verizon Wireless.
During the carrier’s fiscal first quarter
ending March, rising data revenues offset falling voice revenues to boost total
service revenues 5.9 percent to $13.8 billion compared to the year-ago quarter.
Data revenues rose 26 percent year over year to $4.6 billion to offset a 3.2
percent voice-revenue decline to $9.2 billion, Verizon’s latest
Data accounted for
33.3 percent of Verizon’s wireless-service revenues in the quarter, up from
27.9 percent during the year-ago quarter and up sequentially from the fourth
quarter’s 31.9 percent.
The quarter marks
of year-over-year declines in voice revenues, but the
latest decline of 3.2 percent was lower than the 7.4 percent decline in the
fourth quarter and 7.3 percent in the third quarter.
The quarter’s data
revenues include income from 7.3 million connected-device subscriptions, which
include e-readers, vehicle-tracing systems, telematics systems and other
machine-to-machine data-only subscriptions. Verizon began reporting
connected-device subscriptions for the first time and did not report year-ago
statistics. AT&T this week reported that connected devices account for 6.7
percent of its subscriptions at the end of March.
were also driven by the growing number of subscribers with data subscriptions
and more customers buying data-enabled smartphones, which require a data
subscription. In the quarter, smartphones accounted for 36 percent of phones
sold to the carrier’s own postpaid subscribers, excluding phones sold by
airtime resellers such as TracFone.
At the end of the
quarter, 17 percent of Verizon retail postpaid subscribers used a 3G smartphone,
up from 15 percent in the fourth quarter. Another 13 percent used 3G multimedia
phones, a growing number of which are bundled with mandatory data plans.
Verizon offers nine 3G multimedia phones that require a data plan, a
The smartphone and
multimedia-phone percentages were up sequentially from the end of 2009, when 15
percent of the carrier’s retail postpaid subscribers used a 3G smartphone, and
another 11 percent used a 3G multimedia phone.
In other business
results, the carrier expanded its subscriber base for the second consecutive
quarter following three quarters of declines, posting a first-quarter gain of
1.55 million net new subscribers compared to a year-ago 1.3 million gain. The
carrier’s subscriber base stood at 92.8 million, excluding an additional 7.3
million connected-devices for a total of 100.1 million wireless connections.
Most of the
subscriber gains, or 1.26 million, came through resellers, described by Verizon
as a low-cost channel. Only 423,000 net new subscribers came from growth in the
number of the carrier’s own postpaid customers, marking the smallest net gain
in this segment in years. Verizon’s own prepaid subscriber base shrank by
139,000. As a result, the carrier’s own postpaid subscribers accounted for 89 percent
of all subscribers, down sequentially from the previous quarter’s 90.1 percent.
operating income was up 6.6 percent to $4.55 billion for the quarter.