Verizon Wireless appears to be weathering the poor economic climate remarkably well. Parent company Verizon Communications reported its first quarter earnings this morning. The firm had total operating revenues of $26.6 billion, up 11.6 percent from first quarter 2008. In addition, it reported $6.4 billion in cash flow, up $1 billion, or 19.1 percent, year over year.
As usual, the company's wireless unit remains its crown jewel. In the first quarter, Verizon had net customer adds of 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 percent of the company's customers are retail postpaid, with just 300,000 prepaid customers.
Churn: The carrier's churn was 1.47 percent, up 1.14 percent 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 uptick in layoffs in all industries.
Wireless revenues: Total wireless revenue was $15.1 billion, up 29.6 percent year over year. Wireless EBITDA was $6 billion. Verizon's data revenue was $3.6 billion, up 56.2 percent, or 36.8 percent on a pro forma basis, 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 the Alltel integration is going well and Verizon expects to get all Alltel customers on Verizon's billing system in the next few months. And all Alltel stores that now belong to Verizon should get a branding makeover by the fourth-quarter holiday buying season.
ARPU: Total ARPU was $50.74, down from $50.98 in the prior year. Data ARPU was $14.16, up 20.8 percent 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 percent 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 percent 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.
For more:
- see this press release
- see these charts from Verizon
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