Data Revenues Drive Q1 Verizon Gains - Twice

Data Revenues Drive Q1 Verizon Gains

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New York - 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

financial report

shows.

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 the

third consecutive quarter

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.

Data-revenue gains 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 spokesperson said.

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.

Verizon Wireless operating income was up 6.6 percent to $4.55 billion for the quarter.

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