Verizon Confirms New Upgrade Program, Adds 941K Postpaid Subs
This story has been updated to include addtiional information about the launch of Verizon's new "Edge" device upgrade and financing program.
Verizon today confirmed that it will move to an early device upgrade and/or financing program similar to those recently launched by AT&T and T-Mobile. During a second-quarter earnings call Thursday morning, CFO Fran Shammo said the company has recognized the demand for such a program but offered little details on what he called "Verizon Edge."
"I'll let Verizon Wireless give you the details on that at a later time," Shammo said.
The world didn't have to wait long. Verizon Wireless released a press release following the earnings call that revealed detail of Edge. The program, which is similar to AT&T's will be available to customers on August 25. Customers will be able to choose the phone they want and the full retail price of the phone will be divided over 24 months. Customers will pay the first month at the time of purchase. Like AT&T's plan, if they want to upgrade after 6 months, they can then pay off 50 percent of the full retail price of the phone and then choose a new phone and start all over again.
Confirmation of the program came as Verizon posted strong second-quarter earnings that revealed the company added just less than one million postpaid retail wireless subscribers. Overall, Verizon recorded a profit of $2.25 billion, which was up from $1.83 billion in the same quarter last year. Total revenues rose 4.3 percent to just under $29.7 billion.
Verizon Wireless continued to see more customers jumping to the company's LTE network and shared data plans. Fully 59 percent of all data traffic is now carried over LTE and 36 percent of retail postpaid accounts are now on a Share Everything Plan, which allows customers to share data among multiple devices. As of the end of the second quarter, Verizon Wireless had 35 million retail postpaid accounts, with an average of 2.7 connections per account.
The company said it expects quarterly sequential net additions for retail postpaid connections to continue in the second half of 2013.
Smartphone sales continued to rise, topping 7.5 million units, 72 percent of which were LTE capable. Of those smartphones sold, fully 3.9 million, or 52 percent were iPhones.
In the second quarter, Verizon announced its 500th LTE market, essentially completing its 4G rollout. Verizon's LTE network is now available to more than 95 percent of the U.S. population and covers about 301 million people, including those in areas served by the company’s LTE in Rural America partners.
On the matter of expanding into Canada through acquistions of smaller carriers there, Shammo called the move "exploratory" nature, as it hinges largely on a unpredictable regulatory environment in Canada.
Total wireless revenues during the quarter reached $20 billion during the quarter, up 7.5 percent year over year. Retail postpaid Average Revenue Per Account (ARPA) increased 6.4 percent over second-quarter 2012, to $152.50 per month. Wireless operating income margin was 32.4 percent, compared with 30.8 percent in second-quarter
Shares of Verizon were down 2.6 percent to $49.40 in early trading Thursday.