Verizon is hoping to scale its Internet of Things business with a focus on smart cities and connected devices as it aims to offset fierce competition in the wireless market.
The largest US wireless provider said fourth quarter IoT revenues, led by telematics, increased 21 percent to $243 million, up from $217 million the previous quarter. Factoring in acquisitions, Verizon said IoT revenues increased more than 60 percent in Q4 2016.
Elsewhere on the balance sheet, Verizon reported Q4 earnings of 86 cents a share on revenue of $32.3 billion, down from $34.3 billion a year ago. Analysts had expected 89 cents per share on revenue of $32.1 billion.
For the full year of 2016, Verizon's revenue dropped 4.3 percent to $126.0 billion. Analysts were expecting $125.7 billion in revenue.
In terms of subscriber growth, Verizon said it added 591,000 postpaid accounts during Q4, well below the 726,000 predicted by analysts.
It's worth noting that Verizon is diversifying with an expanded digital media business via AOL and (presumably) Yahoo, and its push into IoT. This means the wireless carrier doesn't see unlimited plans as something it needs.
"The Internet of Things including telematics is an area of opportunity that is rapidly growing as the connected world expands," said Verizon CFO Matt Ellis. "Ubiquitous and reliable coverage to support the vast number of devices that of these various platforms is a competitive advantage and we're developing this ecosystem to leverage our best in class networks while providing solutions to verticals such as transportation, energy, agriculture, and smart cities."
In the telematics space Verizon has acquired Telogis and Fleetmatics and in smart cities it bought Sensity and LQD Wi-Fi -- acquisitions that Ellis said gave Verizon "a deep inventory of solutions on our IoT platform to provide to our customers."
Verizon's digital media business, led by AOL, generated $532 million in revenue during the quarter.
As for the Yahoo deal, Verizon pushed back the closing date to the second quarter of 2017. Verizon initially expected the deal to close in Q1 2017 when the $4.8 billion deal was announced last July. The delay stems from Yahoo's revelation that it had been hit by two massive data breaches that resulted in the theft of email addresses, birth dates, and other personal information from more than 1 billion user accounts.
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