Verizon reports drop in Q4 revenues; wireline subscriber base continues to fall

26 Jan 2011

US telco Verizon has reported revenues of USD26.4 billion for the three months ended 31 December 2010. This figure represents a decrease of 2.9% year-on-year. Full year revenues also decreased, down 1.2% to USD106.6 billion. The company blames the drop in revenues on its under-performing fixed line business, which saw its subscriber base decrease by around 9.5% year-on-year. In addition, the company faced a number of one-time charges for redundancies; around 16,000 employees connected with its fixed line activities were let go through a voluntary redundancy programme which commenced in Q2. In spite of decreased operating revenues, the company’s net income for Q4 increased 96% to USD4.65 billion year-on-year. Full year net income declined 11.9% to USD10.6 billion. CAPEX for 4Q10 grew fractionally to USD4.7 billion, although the full year figure exhibited a slight decrease.

In operational terms, Verizon Wireless reported 955,000 total net customer additions during the quarter – excluding acquisitions and adjustments – 803,000 of whom were retail customers. These net additions gave Verizon Wireless a subscriber base of 94.1 million at 31 December, of which 65,000 were connected to its 4G network which was launched in December. Further, the telco has announced that over a quarter (26%) of Verizon’s post-paid retail subscribers had smartphones at the end of 2010. Broadband subscribers rose by 232,000 in Q4, to give Verizon a subscriber base of 8.4 million, with 197,000 net new FiOS fibre-optic cable subscribers added during the quarter. FiOS internet services reportedly passed 15.6 million homes at end-Q4, with total FiOS revenues accounting for 53% of Verizon’s fixed line revenues in the quarter. By the end of the fourth quarter, Verizon had 4.1 million FiOS internet and 3.5 million FiOS TV customers. Meanwhile, fixed line telephony subscribers fell by 9.5% to 14.5 million.

Verizon CEO Ivan Seidenberg commented: ‘Verizon ended 2010 with strong results, driven by solid execution across all our businesses. The fourth quarter capped a strong second half of the year, resulting in improved earnings, solid momentum and an even stronger balance sheet. Verizon Wireless produced another quarter of impressive growth, with record-high profitability, as we continue to drive higher smartphone adoption and data use’.

United States, Verizon Wireless