Tuesday, January 24, 2012

4Q 2011: Verizon Wireless announced a strong growth in revenue.

WorldWide Tech & Science. Francisco De Jesús.

Verizon Wireless announced a strong growth in revenue for the fourth quarter of 2011, driven by increased smartphone penetration and contract customer spending.

The company added 1 million total net connections during the period, with growth of 1.5 million retail customers partially offset by a loss of 490,000 wholesale and other connections, including “a loss of telematics customers.” This took its total to 108.7 million, up 6.3 percent over the end of 2010.

Smartphones accounted for 44 percent of the Verizon Wireless retail contract customer base, up from 39 percent at the end of the third-quarter 2011 and from 26 percent in the year-ago quarter. It also said there had been 2.3 million LTE device sales.

Operating income for the wireless business was US$4.34 billion, compared with US$4.85 billion in the prior year, on operating revenue of US$18.3 billion, up 13 percent.  Service revenue was US$15.1 billion, up 6.4 percent.

The company noted strong growth in its mobile data business, with revenue up 19.2 percent to US$6.3 billion in the quarter, making up 41.6 percent of all service revenue.

Lowell McAdam, Verizon chairman, president and chief executive officer , said: “Verizon Wireless produced particularly strong growth in the fourth quarter. While that diluted wireless margins in the short term, it is good news for revenue and margin growth over the long term, particularly given our leadership in the rapidly developing 4G LTE ecosystem.”

The company had previously noted that its margins have been impacted by sales of Apple's iPhone, which it launched early last year.

The operator is continuing the rollout of its 4G LTE mobile network which, as of yesterday, covered more than 200 million people in 195 markets across the country. Six new LTE devices were introduced in the quarter, while a number of new devices were also unveiled at the CES 2012 event.

The quarter also saw the company inking deals to buy spectrum from a joint venture of Comcast, Time Warner and Bright House Networks, and from Cox TIM Wireless. The deals are subject to regulatory approval.

On a group level, the company trumpeted a 7.7 percent year-over-year revenue growth, increasing to US$28.44 billion, growth described as “a company record.” However, it reported a loss of US$212 million, compared with a profit of US$4.65 billion, with the company noting the effect of non-cash pension items.

It noted growth in demand for its FiOS fibre optic services, and “strategic business products and services.”

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