Verizon Wireless appears to be weathering the poor economic climate well. Parent company Verizon Communications reported its first quarter earnings yesterday.
The firm had total operating revenues of $26.6 billion, up 11.6% from first quarter 2008. In addition, it reported $6.4 billion in cash flow, up $1 billion, or 19.1%, year over year.
Separately, the US cellco is also reported to be in talks with Apple about selling a CDMA EV-DO version of the iPhone. AT&T’s exclusive US rights to the iPhone expire next year, opening the way for Verizon or other carriers to strike a deal.
In the first quarter, Verizon Wireless boosted net customer adds by 1.3 million, excluding acquisitions and adjustments, for a total subscriber base of 86.6 million. Here's a rundown of the key metrics:
Net adds: Verizon added 1.3 million net retail customers, excluding customers acquired in the Alltel acquisition, for a total of 84.1 million retail customers. The company had 86.6 million total customers at the end of the quarter. Verizon executives said during this morning's earnings call that 91% of the company's customers are retail postpaid, with just 300,000 prepaid customers.
Churn: The carrier's churn was 1.47%, up 1.14% year over year. Executives said the reason for the uptick was because of drops in broadband access PC cards and line disconnects in small businesses. They attributed both to the rise in layoffs in all industries.
Wireless revenues: Total wireless revenue was $15.1 billion, up 29.6% year over year. Wireless ebitda was $6 billion. Data revenue was $3.6 billion, up 56.2%, or 36.8% pro forma, from the first quarter of 2008.
Alltel acquisition: Verizon plans to realize $1 billion in expense savings from the Alltel acquisition by the end of next year. Carrier executives said they expect to get all Alltel customers on Verizon's billing system in the next few months..
ARPU: ARPU was $50.74, down from $50.98 in the prior year. Data ARPU was $14.16, up 20.8% over the previous year. Verizon executives said that the main drivers of wireless data are email, broadband usage and messaging. However, non-messaging revenue is up 47% year over year. Verizon President and COO Denny Strigl said on the earnings call that the average ARPU for a BlackBerry user at Verizon is $100.
Smartphones: At the end of first quarter, Verizon had 19.3 million integrated devices in the core Verizon base. Smartphone and PDA sales were strong in first quarter and accounted for 41% of direct device sales. Regarding netbooks, Strigl would only say that the company plans to introduce one later this year. He would not comment on subsidies or pricing.
- see this press release
- see these charts from Verizon