Verizon nets 65,000 LTE subs, details iPhone data pricing
Verizon Wireless (NYSE:VZ) reported 955,000 total net customer additions in the fourth quarter, and bolstered the figure with gains in revenues and margins.
Verizon is the nation's largest wireless carrier, but has consistently trailed No. 2 carrier AT&T Mobility (NYSE:T) in net customer additions. However, AT&T's net adds in past quarters have been due in large part to its exclusive agreement with Apple (NASDAQ:AAPL) to sell the iPhone, and Verizon is set to begin selling the iPhone next month. (AT&T reports fourth-quarter results Thursday.)
iPhone: In a knock against AT&T, Verizon confirmed it will offer unlimited wireless data service to iPhone subscribers for $30 per month.
"I'm not going to shoot myself in the foot," Verizon Communications COO Lowell McAdam told the Wall Street Journal. He explained that an unlimited data service represents an attempt by Verizon to entice AT&T iPhone customers to Verizon. However, McAdam said unlimited pricing will be temporary and that the carrier will likely follow AT&T's move to tiered pricing in the near future.
However, Verizon executives confirmed that the company will discontinue its $15 per month data option for smartphones. The carrier in October introduced promotional data pricing that offered 150 MB of data for $15 per month. Verizon executives said the carrier will discontinue that option at the end of January, and noted it won't be available to incoming iPhone customers.
Shortly before the launch of the iPhone 4, AT&T discontinued its unlimited iPhone data service in favor of two tiers of metered data service--200 MB for $10 per month and 2 GB for $25 per month. The move was an attempt to curtail data usage and ease network congestion.
Verizon executives also reiterated that the carrier is prepared for a possible deluge of data from new iPhone subscribers.
"We are not going to have any flaws on the execution of the iPhone launch," said Verizon CFO Fran Shammo. He declined to provide an iPhone sales estimate.
LTE: Aside from Verizon's plan to sell the iPhone, the carrier also provided several notable insights into its recent launch of 4G LTE network technology. The carrier said it recorded 65,000 net LTE customer additions in the first three weeks of the service's availability, and that 41 percent of those customers were new to Verizon.
Verizon launched LTE services in December across 39 markets covering around 110 million POPs. The carrier currently offers service via two USB modems and provides 5 GB of LTE data for $50 per month or 10 GB of data for $80 per month on either a two-year contract or a no-contract basis; both options carry a $10 per GB overage charge. Verizon has promised to offer LTE smartphones in the coming months.
Tablets: Verizon executives said the carrier has sold 86,000 tablets since launching the gadgets in October. Around 37,000 of those tablets were stand-alone iPads, and the rest were iPads bundled with MiFi devices and Samsung GalaxyTabs.
Net adds: Verizon reported 955,000 total net customer additions in the quarter, a figure that includes 872,000 retail postpaid net customer additions. The company also added 152,000 reseller customers in the fourth quarter. Verizon ended the quarter with 94.1 million customers. Importantly, Verizon said that 75 percent of its postpaid net adds during the quarter were smartphones.
Verizon also said 26 percent of its retail postpaid customer base owned smartphones at the end of the quarter, and it expects that number to increase to 50 percent by the end of this year.
In addition, Verizon reported 8.1 million "other" connections--machine-to-machine applications and telematics services. Thus, the carrier ended the quarter with 102.2 million "total wireless connections."
Financials: Verizon's retail service revenues in the quarter totaled $13.5 billion, up 5.1 percent year over year. The carrier's retail data revenues were $5 billion, up 22.8 percent year over year. Verizon's total revenues clocked in at $16.1 billion, up 5.7 percent year over year. And Verizon's wireless operating income margin was 30.1 percent, an increase of 340 basis points year over year. Click here for details on Verizon's data metrics.
ARPU: Verizon's retail postpaid average revenue per user grew 2.5 percent year-over-year to $53.50. Verizon's retail postpaid data ARPU increased to $19.97, up 19.3 percent year over year.
Churn: Verizon's retail postpaid churn remained at 1.01 percent. Verizon's total retail and total customer churn levels were 1.37 and 1.34 percent, respectively.
- see this release
- see these Q4 metrics from Verizon
- see this NYT article
- see this WSJ article (sub. req.)
- see this Dow Jones Newswires article (sub. req.)
- see this FierceWireless Q4 earnings page
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