Verizon Communications posted a 16 percent increase in net earnings for the fourth quarter, boosted in large part once again by the wireless segment. But there are signs of slower growth among new wireless subscribers.
Verizon Wireless continued with a low churn rate – 1.35 percent among all customers – and ARPU increased year-over-year for the 11th consecutive quarter. Total service ARPU was $51.72, with data ARPU up year-over-year.
But analyst Ken Hyers of Technology Business Research sees some signs of weakness: “Verizon Wireless reported 1.37 million organic net adds in (the fourth quarter), its lowest total since (the second quarter of 2003) and its lowest fourth-quarter results since 2002.”
“Postpaid retail customer churn increased by 11 basis points year-over-year to 1.05% in (the fourth quarter), nearly all of which was attributed to corporate customers reclaiming data cards or disconnecting third or fourth lines as a result of layoffs and cost-cutting,” he said.
Hyers also noted Verizon’s attempt to unseat the 3G iPhone with the introduction of the BlackBerry Storm. Though smartphone sales account for 37% of retail devices sold in the fourth quarter, Verizon’s sales numbers have not measured up to those posted by the iPhone, he said.
The Wall Street Journal reported that the touchscreen BlackBerry Storm sold only 500,000 units during its first month on sale, a diminutive figure compared to the iPhone’s sales, which sold 2.4 million during its first full quarter.
However, Hyers sees a bright spot in the company’s data ARPU, noting it increased year-to-year by 29.1%, to $13.99, the highest among U.S. operators.
The company is the nation’s largest wireless carrier in terms of customers, which reached 72.1 million in the fourth quarter, 97% of whom are retail customers. The rise marks a 9.7 percent increase over last year, when the company had 65.7 million customers. With the addition of Alltel, the carrier has more than 80 million subscribers.