Fourth Quarter and Full Year 2006 Results

I was suprised to see that since the merger, Cingular has added over 12 Million customers in the 2 years. I guess when you see the quarterly numbers at 1.5 to 1.9 you don't realize how fast that adds up.
Oh any yes, that is the only reason Cingular is #1.

Correct me if I am wrong, but hasn't Verizon been adding 1.8 to 1.9 Million for the last few quaters?
I can see Verizon topping the 2 Million this qtr.

 

If we take the sub loss by Sprint from its Nextel area (as they are speculating ) and see what Cingular added we then see that not many are left for them to achieve teh 2 mill plus number. I would say that VZW will have about 1.8 in additions. By the way, I still for see some accounting iregularity on the part VZW as to how they account for their customer base. But one thing that i wish will happen is that the SEC to implement a specific accounting guidline that we can realy see each one of them on an equal formula.

 

That would be nice and very helpful if they make them all report the same & maybe include seperating pre-paid from post-paid ect...

 

Very good topic

 

We can also say that the reason why Verizon has almost 60M is because the merger of Airtouch, Bell Atlantic and GTE and the smaller ones they've acquired along the way. The same goes for Sprint. The reason they have over 50M is because their acquisition of Nextel.

 

Exactly right.



And I do not understand the facination (not yours bobo) with the VZW ownership situation. If the two companies are splitting the profits, then they must also be sharing the cost. So it all works out the same. If they only have to pony up 45 or 55 percent of the cost, then I'm sure splitting the profits is not a big deal.

 

All the costs are now internal from generated reveneu. So Voda is not putting any money into VZW and just making money. VZW wants them out and Voda is asking for over $50 billion but Verizon is not willing to pay that much. In the end for them to compete in a more solid way with AT&T and put up the investmetn for that they would need to buy out Voda's share.

 

News came out of Deutsche Telekom today (news article), this indicates T-Mobile ended the year with:

106.4 million customers at the end of 2006, an increase of 8.8%!

T-Mobile USA: 25,041,000 customers at the end of 2006, an increase of 15.4%, includes 3,351,000 net new customers for all of 2006

Yippee!!!!

 

That is the annual total for T Mo USA and not the last Qtr of 06.

 

Correct.

Here is the press release from Deutsche Telekom.

Net adds: 901,000 in the 4th quarter for 2006 for T-Mobile USA. Out of this total, 783,000 are contract customers.

For all of 2006, T-Mobile USA added 3,351,000 net new customers. T-Mobile internationally added 8,573,000.

 

Yes, but when those companies merged to create Verizon they had nearly 30 million customers. Verizon has doubled in size since then.

Cingular was only able to pass Verizon because they acquired a carrier as big as they were at the time, and Cingular came to be, originally, because of a "merger" between Bell South and SBC's properties.

Sprint did the same thing as Cingular by acquiring a near-equal size competitor.

 

well they all have their way of size comparison. VZW did also do a few mergers that increased their numbers since then but did not stand out as much as they were never the size that we speak of here. One thing to keep in mind, VZW became numebr 1 because of the merger so it is no diferent for any other doing the same.

 

My point was that Verizon Wireless didn't need to merge with a near-equal size competitor to become as large as they are. The merger that formed Verizon Wireless was large to begin with, but they have more than doubled in size since they were formed.

No mega-merger, since their formation, was needed for them to reach 60 million customers.

 

It was a mega and was antion wide for VZW, so others had to do the same. Since the meger of Cingular/ATTW they both grew in size close to an equal basis since then. one can argu in many ways but it all adds to the same thing. One thing you need to keep in mind is that VZW aslo grew on the demise of ATTW when they had the worst 3 months in their history, as many know, ATTW had a major problem with their computers when they did the system upgrade and it basicaly locked them out of adding customers or even CS being able to access customer accounts. At that point VZW bennefited the most out of that and the original Cingular did not.

 

This statement in the article is a bit confusing: -- 211,000 Net Increase in Postpay Converged Device Users in the Fourth Quarter 2006, Up From 172,000 in the Third Quarter 2006 ". Any one can clarify please? My take on it is that this is the number after accounting for the churn (postpaid lost) and from what I understand on Cingular is that they reported the net net number of add ons after discounting the churns.

 

It is confusing, especially reading this part:

Unless they are talking about customers that re-signed contracts for new devices?

 

Yes, they were fairly close on the Post-Paid add's. I do think Cingular has to do something to increase their Post-Paid adds vs Pre-Paid, since investors prefer seeing Post paid over Pre-paid.


I guess with Sprint's bleeding of customers, they went to all 3 National carriers vs just the 2 big ones.

 

That's actually a very impressive stat for T-Mobile especially considering all the additional markets that Cingular covers.

I also wander if we'll see eye popping numbers for Verizon and if there will be any trickling down of those customers to Alltel and USCC.

 

http://biz.yahoo.com/prnews/070129/nym026.html?.v=80
Verizon Wireless Continues Industry-Leading Performance
Verizon Wireless remains significantly ahead of the industry with record retail net customer additions, and strong revenue growth, profitability and low churn in the fourth quarter 2006.

Verizon Wireless remains the largest U.S. wireless company in terms of total revenues and the largest wireless data provider based on revenues, and has the most retail customers (businesses and consumers directly served by Verizon Wireless and who buy Verizon Wireless-branded service, rather than customers of the company's resellers).

Verizon Wireless added 2.3 million net customers in the fourth quarter 2006 for a total of 59.1 million customers nationwide, a 15 percent increase in total customers from the end of the fourth quarter 2005. This was the second time in the company's history that quarterly net customer additions exceeded the 2 million mark.

Of the company's net customer additions in the fourth quarter, a record 2.2 million were retail, a 23.6 percent increase over the fourth quarter 2005 and almost all post-paid customers. Based on publicly available information, the company has the largest retail customer base in the industry -- 56.8 million retail customers of its 59.1 million total customers (which include retail and wholesale) -- and the company added 7.8 million to its retail customer base in 2006.

The company continued to set industry records for low churn. Total churn was 1.14 percent for the quarter and 1.17 percent for the year. Churn among the company's retail post-paid customers -- almost 93 percent of total customers -- was even lower, at 0.89 percent for the fourth quarter and 0.91 percent for the year.

Verizon Wireless quarterly revenues topped $10 billion for the first time. Total revenues were $10.1 billion in the fourth quarter 2006, a 16.3 percent increase compared with $8.7 billion in the fourth quarter 2005 -- driven by strong customer growth and demand for data services. Full-year 2006 Wireless revenues were $38.0 billion, an increase of 17.8 percent compared with 2005.

Wireless operating income margins were 25.0 percent for the fourth quarter and 25.2 percent for the year, the result of the company's continued focus on efficiencies, even as it added record net retail customers.

Wireless EBITDA margins were 43.2 percent for the fourth quarter and 44.3 percent for the full year, an improvement of 1.1 percentage points from full- year 2005. (EBITDA -- or earnings before interest, taxes, depreciation and amortization -- is a non-GAAP measure that adds depreciation and amortization to operating income; EBITDA margin is calculated by dividing EBITDA by wireless service revenues.)

 

Wow, Very Impressive numbers and a nice Dig on Cingular with their Post Paid Adds vs Pre-Paid.

Maybe This will make Cingular look twice at their plans & what they are doing,
and heck they are at 59.1 Million customers now only 2 Million away from Cingular and still slowly closing in (as your chart stated bobolito, it won't be long)

 

Looks like Cingular and Verizon are neck and neck at this point...

I hope 2007 is a year of fierce competition and price wars between the two... New price plans? Early N&W? Cheaper SMS packages?

Also, I wonder how big of an impact the iPhone will have on numbers. I'm sure the die-hard apple fans & cell phone junkies will get the phone the day it comes out... but will there be a significant migration from other carriers just for the phone?

Just a thought... Can't wait to see how 2007 ends.

 

2.3M is really a record for VZW as well as 2.4M a record for Cingular. It is also the first time ever Cingular adds more customers than Verizon, which also means this time they didn't close the gap on Cingular. Plus, 2.4M is the highest ever quarterly net customer addition by any US carrier. The previous US quarterly record was held by Verizon at 1.95M.

This means that either the market isn't giving up yet (no signs of saturation) or it simply means massive migration from the smaller carriers.

It is funny however the obvious attempt that the Verizon PR makes to stand out as the "leader" or the "largest" in every category they create just for that purpose. If they aren't number one in one thing, there are plenty of other things they can be number one on and they want to make sure it stands out.

 

I guess that's an advantage that Verizon has by posting their results after Cingular, so they can add these digs into their press release.
I am sure the 2 of them will continue this back & forth bickering thru their press release's and still have some hope Cingular will re-evaluate their SMS/Data plans to try & provide more competition between the 2.

 

With all press releases for 06, it sure looks like 07 wil be a price war. However, this will most likely happen on the data side first then if need be it will move slowly to the voice side. The first qtr will remain stand still and we will most likely see movement in the 2nd Qtr.

 

Did VZW mention How Many are still Pure Analog Customers?
VZ should buy out Vodafone so they Can Have all these Earnings
to themselves.

If VZW becomes the Biggest, Vodafone will Demand an
Even Higher Price.

 

I do hope you're right, but I don't see a price war when there are only 2 big players and each are netting over 2 million in 3 months. With only one main alternative, why risk the profitability of each customer?

 

If Sprint and T-Mobile were any serious threat to Verizon and Cingular, then we would see a price war.