Verizon Wireless, Cingular show huge growth

The nation's No. 1 and No. 2 operators, Verizon Wireless and Cingular Wireless, announced stellar customer additions during the fourth-quarter Christmas selling season. Verizon added a record 2 million customers, while Cingular announced 1.8 million new subscribers. U.S. wireless carriers are expected to add 24 million subscribers in 2005 once the tallies are in, and analysts of course are predicting a slow down in 2006 because the U.S. is hitting saturation. Most of the competition will be for existing customers. It will be interesting how Wall Street reacts this year, since it has measured carriers' performance largely on customer additions. Hopefully, carriers won't react irrationally by adding less profitable customers.

Analysts are worried about the growth in family plans and prepaid, both of which bring in less revenue per subscriber. Analysts believe 1 million of Cingular's customers came from prepaid reseller TracFone, but at least the operator is insulated from falling ARPU because it is allowing a reseller to tackle that market. Sprint Nextel's subscriber additions might be a disappointment, and analysts worry the carrier's customer base is mixing more to prepaid because of the success of Boost Mobile, which is a subsidiary of the carrier's and not an MVNO that offers prepaid. Recall that Sprint in 2002 took a disastrous dive because of low-end prepaid customers.

For more about U.S. operators' Q4 results:
- check out this article from Investor's Business Daily

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