Verizon preps fourth quarter device barrage; Droid will 'stimulate demand'

Verizon preps fourth quarter device barrage; Droid will 'stimulate demand'

Summary: Verizon delivered a solid third quarter courtesy of its wireless business, which added 1.2 million net customers excluding acquisitions.

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Verizon delivered a solid third quarter courtesy of its wireless business, which added 1.2 million net customers excluding acquisitions. The company also said it is set up for the fourth quarter with the launch of Research in Motion's Storm 2 on Wednesday, two Motorola Android devices and 12 other handsets.

However, AT&T added customers at a faster pace in the third quarter on the strength of the iPhone. Verizon is hoping to change that equation via a partnership with Google. John Killian, CFO of Verizon, characterized the company's wireless performance as strong and said there "are plenty of revenue growth opportunities" ahead. It's clear Verizon is betting big on Android.

"We think our new device lineup will stimulate demand," said Killian, on a conference call with analysts. Killian said that the Storm 2 will be available Wednesday and the Droid device "will be groundbreaking."

Verizon on Monday reported third quarter net income of $2.88 billion, or 41 cents a share, on revenue of $27.3 billion, up 10 percent from a year ago. Non-GAAP earnings were 60 cents a share, a penny better than Wall Street estimates (statement, quarterly presentation).

As usual, the quarter was all about the wireless business. By the numbers:

  • Verizon ended the quarter with 89 million wireless customers, up 25.7 percent courtesy of acquisitions---notably Alltel.
  • The company had a post-paid churn of 1.13 percent. AT&T had 1.17 percent.
  • Cash expense per customer was $27.52 in the third quarter, down from $28.52 a year ago.
  • Data revenue was 30.5 percent of wireless service revenue.
  • Wireless revenue was $15.8 billion, up 24.4 percent from a year ago and 4.9 percent excluding acquisitions.
  • $5.1 billion in wireless capital expenses year to date.
  • The company said its integration of Alltel was on track. All Alltel customers have been converted to Verizon's billing system.

Verizon also posted solid results for its FiOS efforts. The company added 198,000 net FiOS Internet customers for a total of 3.3 million. Verizon said it added 191,000 new FiOS TV customers.

Killian noted that FiOS additions were off the pace of the last two quarters. He added that Verizon eased off the promotional activity. On the capital spending front, Killian said that the FiOS buildout will be complete by the end of 2010 and that fact will free up capital for 2011.

Verizon, which reorganized its wireline business into one unit that combines FiOS, legacy services and the enterprise business, said that corporate sales remain muted.

Killian said he wasn't seeing any "meaningful improvement" in the enterprise business, but did add that CIOs were becoming interested in managed services and select capital investments.

Topics: Verizon, Banking, Enterprise Software, Mobility, Networking, Wi-Fi

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7 comments
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  • Nice and Sharp Future Focus of Verizon!! BUT....

    The article covered most of the solid facts containing the research of verizon. They are the strong contender for the future of Wireless Industry of US.

    But still, the roadmap of telecom is not predetermind.

    Also the dwindling policies of FCC are creating roadblocks for the companies. I guess they have deviced a solid platform before they invest in any of the new technology especially 4G.
    Hardik Upadhyay
  • solid third quarter?

    "Verizon Communications Inc. posted a 30% decline in its
    third-quarter profit as rival AT&T Inc. and Apple Inc.'s
    iPhone took a bite out of its wireless growth," Roger Cheng
    reports for Dow Jones Newswires.

    "The New York telecommunications company has done an
    admirable job of keeping pace with AT&T, which has an
    exclusive deal to sell the iPhone, but finally faltered amid
    record sales of the Apple device, as well as heightened
    competitive pressure on the low end. The number of new
    contract customers fell by more than 50% from a year
    ago," Cheng reports
    ShazAmerica
  • RE: Verizon preps fourth quarter device barrage; Droid will 'stimulate dema

    Wow. Everything I've read about Verizon most recently has
    had its drop in earnings at least mentioned quite visibly in
    the article, if not the headlines. Not a word of that spoken
    here.

    Someone is disconnected, if not on a payroll.
    Wingsy
  • Good arsenal of smartphones

    It's surprising that it took so long for Verizon to launch Android on their network, but it appears that they are coming out with all guns blazing. Add the Storm2 & the Palm Pre (early 2010) and they will have a good arsenal of really great smartphones.
    linuser
    • They'll need more than that...

      In the end, it doesn't matter how many choices a
      carrier has. They need to have the best phone.
      AT&T is the weaker carrier by all measurable
      standards, yet they had nearly twice as many new
      customers and lower churn rates due to the
      success of the iPhone. Verizon would be wise to
      do whatever it takes to get the iPhone on their
      network.
      techconc
  • RE: Verizon preps fourth quarter device barrage; Droid will 'stimulate demand'

    good help
    jennifer_007
  • RE: Verizon preps fourth quarter device barrage; Droid will 'stimulate demand'

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