Verizon Communications, the second-largest US telecoms group, reported a 31% increase in Q3 profits, fuelled by continued growth in its Verizon Wireless, which is a joint venture with the UK's Vodafone group.
Net income increased to US$1.67 billion (€1.29 billion) , compared with US$1.27 billion (€0.98 billion) a year ago, when higher international taxes had an adverse effect.
As the Financial Times reports, "Verizon's results underscore the enormous shift taking place in US telecoms as fixed-line residential customers abandon traditional lines in favour of wireless and lower cost broadband telephone services offered by cable TV operators.
Like other telecom operators, Verizon gets more than half its revenues from land lines. About 1.19m land-line customers cut their lines in the quarter. The company also lost 96,000 DSL customers and its total of switched access lines fell by 3.6 million from a year ago, and now stands at 37.1 million."
In an attempt to stem the tide and attract customers back, Verizon is investing US$23 billion over seven years to roll out fibre infrastructure.
"¢ Verizon's CEO Ivan Seidenberg used the results conference to clarify that Verizon Wireless was going ahead with its acquisition of privately-held Alltel, as announced in June, for about US$5.9 billion.
The Street reports that based on Alltel's projected net debt at closing of US$22.2 billion, the total value of the transaction will be US$28.1 billion. Alltel was bought by TPG Capital and GS Capital Partners for US$27.5 billion in 2007.
The combined companies will have more than 80 million subscribers, putting it ahead of AT&T.