VZW Buoyed by Postpaid Subs, LTE Devices
Verizon Communications' took a bit of a hit on its wireline side in the third quarter from union strikes, Hurricane Irene and the economy, but that didn't slow down its wireless division. Verizon Wireless posted stellar results today on a healthy rise in new contract customers and LTE device sales.
The operator added 882,000 net postpaid subscribers in the third quarter, nearly triple the number of postpaid subscribers added by rival AT&T during the same period. Including wholesale customers and other connections, Verizon Wireless added 1.3 million net new subscribers.
Customers flocked to Verizon's LTE service. The operator sold 1.4 million LTE devices during the quarter, some of which were included in the 5.6 million smartphones sold to customers during the quarter. Nearly 40 percent of Verizon's customers now use smartphones, up from 36 percent last quarter.
Verizon CFO Fran Shammo said in a call with analysts that it was too early to give out numbers on the new iPhone 4S, but said the ratio of the customers to upgrades was the same it had been in the past: 20 percent new customers to 80 percent upgrades from existing subscribers.
The strength of Verizon's smartphones helped improve churn while boosting sales and ARPU. Postpaid churn dipped to 0.94 percent, from 1.07 percent last year, and overall churn hit 1.26 percent, from 1.43 percent last year.
Postpaid ARPU rose 2.4 percent over last year to $54.89, and data ARPU rose 15.7 percent to $22.22. Verizon brought in $6.1 billion in data revenues, a 20.5 percent increase over last year. Data now comprises more than 40 percent of Verizon's service revenues, which rose to $17.7 billion.
"Verizon Wireless delivered impressive results across the board in the third quarter, and we are geared up for an even better fourth quarter, with new smartphones, tablets and data devices coming to market," Verizon Communications President and CEO Lowell McAdam said in a statement.
Overall, Verizon Communications made $1.37 billion on sales of $27.9 billion from both its wireline and wireless businesses.