Verizon calls wireless subscriber growth strong

[ComicalMoodyDan]

Verizon calls wireless subscriber growth strong
By Leslie Cauley, USA TODAY Wed Jul 27, 6:49 AM ET

Verizon Wireless is catching up with rival Cingular, adding 1.9 million subscribers to finish the second quarter with 47.4 million subscribers overall, the company said Tuesday.

At that level, Verizon is 4.2 million behind No. 1 Cingular. The run-up is significant, considering Cingular had a 7 million lead last October, when its merger with AT&T Wireless closed.

Verizon Wireless' "churn" figures - which indicate how many people drop off in any given month - were also good, just 1.2%, notes John Hodulik, an analyst at UBS Investment Research. Revenue per subscriber declined, suggesting the carrier is cutting prices to capture market share, he says.

At the current rate, Verizon could pass Cingular as the USA's No. 1 wireless carrier in 12 to 18 months, predicts Roger Entner, a wireless-industry analyst for Ovum. (Verizon Wireless is controlled by Verizon Communications, with Vodaphone as a partner.)

"Verizon is getting stronger every quarter, while Cingular is declining," he says.

In the most recent quarter, he notes, Cingular added 1.1 million subscribers. That was down from the 1.8 million subscribers it added a few quarters earlier. Its churn rate was 2.2% a month last quarter.

Verizon's wireless results were offset by more sobering news in its core local phone business. In the second quarter, Verizon said it lost more than half a million consumer telephone customers.

The problem is going to get worse. Consumers across the USA are increasingly dumping traditional phone lines in favor of VoIP - Voice over Internet Protocol - and wireless, putting pressure on the big phone companies to make up the declines elsewhere. That's why Verizon and others are scrambling to develop new revenue streams.

Determined to keep its momentum, Verizon said it will beef up marketing efforts with respect to "naked" DSL - industry shorthand for selling DSL to people who don't buy traditional phone services from the same carrier.

In April, Verizon started allowing its existing DSL customers to keep their service even if they dumped regular phone service. On July 1, it started letting people in its 13 Eastern states buy naked DSL. Later this year, Verizon is expected to expand the offer to its 15 Western states.

The move is sure to cause a stir among the big telephone companies, which have been loath to offer naked DSL for fear that it might hasten erosion in their core phone business.

But that business is going south, says UBS' Hodulik. The traditional "land line" business is eroding by 8% to 10% a year, he says, and getting worse by the quarter. Naked DSL is "a great idea," he says. "They're missing out on an important segment by not offering it."

Overall, Verizon said revenue rose 4.6% to $18.6 billion in the second quarter. Net income increased to $2.1 billion, or 75 cents a share, a 17.6% increase. The latter included the sale of Verizon's Hawaii phone and directory operations. Adjusting for the sale, net income was $1.8 billion, or 63 cents a share.

Verizon calls wireless subscriber growth strong

[Andy]

Churn wasn't only good- It was EXCELLENT.

[Mobile Mike]

Verizon's big advantage is that it is the only large carrier not in the beginning or middle of a merger. That stability benefits them to a greater degree, no matter how the benefits of the mergers affect Cingular and Sprint. Cingular and Sprint have an uphill climb with debt, integration on all fronts, and the ever changing wireless environment. Verizon Wireless is in the drivers seat right now and as long as they stay steady they will continue to be in excellent shape. These numbers prove that.

[larry]

Originally Posted by lbmike212 Verizon's big advantage is that it is the only large carrier not in the beginning or middle of a merger. That stability benefits them to a greater degree, no matter how the benefits of the mergers affect Cingular and Sprint. Cingular and Sprint have an uphill climb with debt, integration on all fronts, and the ever changing wireless environment. Verizon Wireless is in the drivers seat right now and as long as they stay steady they will continue to be in excellent shape. These numbers prove that.

Spoken like a true Verizon fan.

[Andy]

Originally Posted by larry Spoken like a true Verizon fan.

Oh Larry, come on , I have to agree with him as well(but what does it matter...coming from me, lol).
Verizon must be doing something right, no doubt- the most net subscribers, a record, plus the lowest churn.

[Fire14]

Originally Posted by lbmike212 Verizon's big advantage is that it is the only large carrier not in the beginning or middle of a merger. That stability benefits them to a greater degree, no matter how the benefits of the mergers affect Cingular and Sprint. Cingular and Sprint have an uphill climb with debt, integration on all fronts, and the ever changing wireless environment. Verizon Wireless is in the drivers seat right now and as long as they stay steady they will continue to be in excellent shape. These numbers prove that.

I do have to agree with you, they have a big advantage right now over Cingular & probably will with the Sprint/Nextel merger, and they need to do what they can to get as close to the top before the Cingular dust settles then the Sprint dust as well.
Also as long as Cingular keeps there rates where they are, they won't make alot of headway, but they did still have an better quater then alot of people expected.

[Andy]

Originally Posted by Fire14 I do have to agree with you, they have a big advantage right now over Cingular & probably will with the Sprint/Nextel merger, and they need to do what they can to get as close to the top before the Cingular dust settles then the Sprint dust as well. Also as long as Cingular keeps there rates where they are, they won't make alot of headway, but they did still have an better quater then alot of people expected.

I honestly don't think that the Verizon has all that much to fear out of the Sprint merger. I mean yes, coverage will improve in some areas, but overall I think that Verizon Wireless will still stand in many people's heads as more reliable and bigger than what the new Sprint will be. Does that make sense? Verizon has very well marketed their reliability, which is in a lot of areas, true.

[Fire14]

Originally Posted by Andy84094 I honestly don't think that the Verizon has all that much to fear out of the Sprint merger. I mean yes, coverage will improve in some areas, but overall I think that Verizon Wireless will still stand in many people's heads as more reliable and bigger than what the new Sprint will be. Does that make sense? Verizon has very well marketed their reliability, which is in a lot of areas, true.

Yes that makes alot of sense & I do agree, they won't have to worry about Sprint for a while, but who knows what may happen once they get fully integrated, I guess Cingular will be the test once they get there act together.

[Andy]

Originally Posted by Fire14 Yes that makes alot of sense & I do agree, they won't have to worry about Sprint for a while, but who knows what may happen once they get fully integrated, I guess Cingular will be the test once they get there act together.

You are correct, I think, in the long run, both, Verizon and Cingular might lower their prices and become more competitive under themselves...or they will just always adjust prices to match each other

[Steve B]

Originally Posted by larry Spoken like a true Verizon fan.

GIVE ME A 'V'!....."V"!, GIVE ME AN 'E'!....."E"!, GIVE ME AN 'R'!....."R"!, GIVE ME AN 'I'!....."I"!, GIVE ME A 'Z'!....."Z"!, GIVE ME AN 'O'!....."O"!, GIVE ME AN 'N'!....."N"!

GOOOOOOOO VERIZON!

[bobolito]

Ok cheerleaders. Calm down!

But I have to agree. Verizon is just taking advantage of basically being in the right place at the right time. They got their merger done before everyone else and are now enjoying the benefits. I hope that when Cingular and Sprint are done it isn't too late for them. Let's not forget the US market is close to reaching saturation and this may very well be the only time we see a company post net adds as high as Verizon did.

I truly enjoy seeing Verizon pounding on Cingular. This will force Cingular to come down from the clouds and come back down to earth. They are still not that mature to be thinking about being so arrogant. I can compare Cingular to an immature teenager that thinks is an adult already.

However, let me clarify one thing: Cingular is not accumulating debt. SBC and Bellsouth financed a small amount of the cost of AT&T Wireless. The rest came off assets sold and savings they had. The merger expenses are being covered completely by Cingular's revenue. This is why Cingular's net income is so low and sometimes they have posted losses (meaning they spent more than what they gained). But they are not borrowing money for the merger expenses.

[agentHibby]

Originally Posted by Andy84094 You are correct, I think, in the long run, both, Verizon and Cingular might lower their prices and become more competitive under themselves...or they will just always adjust prices to match each other

So far it been in the other direction
International rates up
Family Share price plan going back up (I think if I am right $15 goes back in Nov)
Text Messaging UP
change of ESN charge
no more $50 plans $40 or $60
No more off peak hoildays
2 year have to pay an activation fee
I know there are others

I don't know if this is due to speding tons of money on airwaves and a few networks??

[danny boi]

Originally Posted by agentHibby So far it been in the other direction International rates up Family Share price plan going back up (I think if I am right $15 goes back in Nov) Text Messaging UP change of ESN charge no more $50 plans $40 or $60 No more off peak hoildays 2 year have to pay an activation fee I know there are others I don't know if this is due to speding tons of money on airwaves and a few networks??

Don't forget the extremely high rent Verizon Wireless pays to it's daddy Verizon Communications and mommy Vodafone Group Plc.

What kind of company would they be if they went about solo? (Not that VZ would ever let that happen)

[larry]

Originally Posted by Andy84094 I mean yes, coverage will improve in some areas, but overall I think that Verizon Wireless will still stand in many people's heads as more reliable and bigger than what the new Sprint will be. Does that make sense? Verizon has very well marketed their reliability, which is in a lot of areas, true.

Yes now that Verizon has managed to brainwash the general public into thinking they are the best everywhere and all the time with their advertising they will be tough to beat.

[NYCDru]

I am not pleased about the lack of a $50 plan.

However, Verizon Out-performing Cingular quater after quater has to get on Cingular's nerve's enough for them to lower there rates to compete. That will make Verizon lower there rates eventually so as to not be moved from there ever shrinking margin between them and Cingular.

[agentHibby]

Originally Posted by YourDaddy Don't forget the extremely high rent Verizon Wireless pays to it's daddy Verizon Communications and mommy Vodafone Group Plc. What kind of company would they be if they went about solo? (Not that VZ would ever let that happen)

Well I think Mommy and daddy pay alot so Cellco Partnership can get what they need airwaves, EV-DO, more networks, more customers.

I think even if Vodafone exits VZW could not spend 5~6 billion on upgrades and EV-DO. I don't think they could spend the billions they have in PCS airwaves either.

[WirelessBeachBum]

Originally Posted by agentHibby Well I think Mommy and daddy pay alot so Cellco Partnership can get what they need airwaves, EV-DO, more networks, more customers. I think even if Vodafone exits VZW could not spend 5~6 billion on upgrades and EV-DO. I don't think they could spend the billions they have in PCS airwaves either.

Don't forget what kind of revenue having 47.5 million customers brings in...Verizon landlines big money maker is Verizon Wireless, and Vodaphone doesn't seem to sad about the partnership either.

Just think if you sent a text message to all of the Verizon Customers (assuming they didn't have text plans) Verizon would make $950k on that one message! $.02 x 47,500,000

So I think Verizon could continue to fund network expansion and growth....but they still have to stick to their business plan and not freak out like many companies do when they are in this situation.

[Mobile Mike]

Originally Posted by larry Spoken like a true Verizon fan.

After 11 years of service with them, you're darn right!!

I could also be called a "T-Mobile Fanboy". I am happy with both. Tried Cingular and it didn't work for me. Regardless of whether my comments are considered "fanboy"ish, there is a ring of truth to them. Verizon has been on a tear the past few years, PLUS T-Mobile and Verizon are the ONLY major cellco's not in the middle of a merger.

Wasn't it Cingular that had to catch up to Verizon? Isn't that what Sprint/Nextel are trying to do? So I'm happy with my service, and have been for a VERY long time. We are all fanboys, and there is nothing wrong with it. Verizon sucks for many people, just as Cingular does for me. Verizon obviously doesn't suck for me, so there you go!

It's all in good fun.

[Fire14]

Originally Posted by bobolito I truly enjoy seeing Verizon pounding on Cingular. This will force Cingular to come down from the clouds and come back down to earth. They are still not that mature to be thinking about being so arrogant. I can compare Cingular to an immature teenager that thinks is an adult already.

This is an excellent way to put it, reminds me of my daughters.

I am not pleased about the lack of a $50 plan. However, Verizon Out-performing Cingular quater after quater has to get on Cingular's nerve's enough for them to lower there rates to compete. That will make Verizon lower there rates eventually so as to not be moved from there ever shrinking margin between them and Cingular.

I do agree, some of the older plans were better just because of the options people had, and feel sometimes more is better especially with plan options, they made it easier for the reps vs the customer.
I think until they have more of the integration done & the networks having less problems, they will hold off just to slow down on new adds & give the network a chance to catch up & handle the customer load better, then they may do a price war of course that may not happen either if there ARPU stay's high enough & churn manages to go lower & new adds keeps a decent pace.