Verizon holds steady, adding 180K FiOS TV subs
Verizon added 193,000 FiOS Internet and 180,000 FiOS video net additions in its first quarter. Minus cancellations of mostly DSL customers, Verizon reported an overall net increase of 104,000 broadband connections from Q4 2011.
All of those results were very close to what Verizon reported in its immediately preceding fourth quarter.
The company said it now has more than 5 million FiOS Internet customers.
Revenue in the wireline side of the business slipped some more, from $10.1 billion in the immediately preceding Q4 to $9.9 billion in the first quarter just concluded. Wireless operations continue to thrive, however, and overall, corporate revenue and profit were both up.
The other big story on the wireline side for Verizon was business services. Verizon Enterprise Solutions, which combines all of Verizon’s cloud, mobility and technology solutions for business and government customers globally, unveiled strategic agreements in the first quarter of 2012 to develop offerings in mobile health, electronic health records management and secure e-prescribing.
Separately, Verizon announced that Orange Business Services and Verizon Enterprise Solutions will work together to provide enterprises video collaboration services. The two companies have signed an interprovider connectivity agreement, enabling Verizon Immersive Video Exchange customers and Orange Telepresence Community customers to collaborate via video meetings with a greater pool of participating customers, partners and suppliers worldwide using Cisco TelePresence endpoints.
During the quarter, the organization also announced a digital signage solution for retail customers, powered by Verizon’s 4G LTE network and infrastructure; unveiled new telematics solutions for the automotive and transportation industries; and rolled out a cross-platform open video communications capability.
On the wireless side, Verizon has been making hay with its 4G broadband network.
The iPhone continues to dominate Verizon's device lineup. The operator sold 3.2 million iPhones during the first three months of this year, Shammo said, down slightly from the 4.2 million it sold in the fourth quarter when sales were buoyed by the holiday season. Overall smartphone sales totaled 6.3 million. Smartphones now comprise about 47 percent of Verizon's customer base, from just 32 percent last year.
Verizon also sold 2.9 million LTE smartphones, tablets and USB modems during the first quarter, bringing its total number of LTE customers to 8 million. Two-thirds of its LTE customers own smartphones, Shammo said.
Verizon has been working to move customers over from its legacy 3G network to its new LTE network. About 9 percent of its customer base now uses the LTE network, up from less than a percentage point shortly after the service's launch last year.
The influx of lucrative new iPhone customers over the last two quarters helped grow retail service revenue at its highest rate in three years. Retail service revenue grew 8.9 percent year-over-year to $14.89 billion, contributing to total wireless sales of $18.27 billion. The rise in sales boosted operating income, which rose nearly 20 percent to $5.2 billion.
Postpaid ARPU rose to $55.43 on a 16 percent increase in data ARPU, which rose to $23.80. Total data revenues continued their upward momentum, coming in at $6.6 billion. Data now comprises nearly 43 percent of Verizon's service revenue.
The one dark spot on Verizon's otherwise healthy earnings was a dip in the number of new customers signing up for service. The company added just 734,000 net new customers, a 16.5 percent drop from the 879,000 it added during the same period last year.
Its number of new postpaid customers dropped 44 percent to 501,000, from the 906,000 net postpaid customers it added last year. The decline was offset by the addition of 233,000 net new prepaid customers. Postpaid churn came in at less than a percentage point at 0.96 percent.
Net adds have been slowing down for many providers amid higher saturation in the wireless market. Even so, Verizon managed to eke out a 5 percent increase in its overall customer base, which now numbers about 93 million.
Aside from his kind words for Microsoft, Shammo also discussed shared data plans and its decision yesterday to sell off some of its precious 700 MHz spectrum.
Bucket plans for data will launch around "mid-summer," Shammo said, confirming earlier statements made by Verizon executives. The new family-style data service will allow customers to "easily connect other devices to that plan," he said.
Shammo also attempted to clarify Verizon's reason for deciding to sell off some of the 700 MHz spectrum it purchased in 2008.
"As company policy, we will not hoard spectrum," he said. After forging a deal to buy AWS spectrum from four cable companies last year, Verizon decided its lower 700 MHz A-block and B-block "does not fit as nicely into our spectrum holdings as it may for others."
As for the fact that the 700 MHz selloff is contingent on the closing of the AWS deal, Shammo said that without the AWS spectrum, it would still need its A-block and B-block assets.
"We didn't just wake up yesterday and decide to sell spectrum because we're running into roadblocks at the FCC," Shammo said, voicing confidence the AWS sale would receive government approval by mid-summer.
– Wireless Week’s Maisie Ramsay contributed to this report