Verizon's wireless profits to remain solid despite competition, CFO promises

Verizon Communications CFO John Killian said the carrier expects to exceed its wireless profit expectations for the coming quarter, evidence that Verizon Wireless will continue its forward momentum. In the first quarter, Verizon's wireless EBITDA margin on service revenues (non-GAAP) was 46 percent, and Killian said the carrier would beat its current expectations of between 43 percent and 45 percent, although he did not set a new target.

Killian's comments are notable in that the carrier continues to remain largely outside the wireless industry's hype cycle. While industry pundits remain focused on the iPhone--exclusive to AT&T Mobility--and unlimited, prepaid gambits from the likes of Boost Mobile and Virgin Mobile USA, Verizon Wireless has managed to excel in both finances and quarterly net customer additions without the benefit of such headline-grabbing actions.

Indeed, Killian addressed the bubbling price war centered on unlimited, prepaid services at the $50 price point (spearheaded by Boost). According to Reuters, Killian said Verizon Wireless would not compete in the unlimited, prepaid market, even with the notable growth in the space in the recent months. Instead, it appears Verizon Wireless will remain on track with its current offerings, which include an unlimited postpaid offering at $100 and a buy-one-get-one-free BlackBerry promotion.

In separate news, Verizon Wireless parent Vodafone reported earnings today, and the company's full-year net profit fell by more than half to $4.72 billion from the year-ago period. Vodafone has been faced with slowing profitability in Europe, but continued growth in emerging markets and a solid revenue stream from its 45 percent stake in Verizon Wireless.

For more:
- see this Reuters article
[1]- see this Vodafone earnings article [2] (sub. req.)

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