Verizon Wireless, With iPhone Help, Posts Double-Digit Growth in Q1

Verizon Wireless sold 3.2 million iPhones during its 2012 first quarter, which greatly contributed to a 21.1 percent boost in wireless data revenue.

Verizon Wireless began selling the Apple iPhone 4S in October, and through December, the smartphone was a popular holiday gift. The result of all those new Web surfers, App Store visitors and music streamers was a 21.1 percent€”or $1.1 billion€”increase in wireless data revenues, the carrier announced April 19.

During its fiscal 2012 first quarter, data revenues reached $6.6 billion. Service revenues, meanwhile, increased 7.7 percent year-over-year, representing Verizon€™s highest growth rate in three years.

With consumers€™ appetites for a new iPhone sated, the number of new customers Verizon added during the quarter dipped, to 734,000, for a total of 93 million, compared with the 955,000 it added the quarter before. But, as the iPhone represents an expensive gamble for carriers, since the companies heavily subsidize the devices in expectation of tying them to data-hungry users on two-year contracts, it was that service revenue figure that the company needed to see aggressively rise.

Rising with it, into double-digits, was earnings. Verizon Wireless€™ income for the first quarter was $5.2 billion on revenues of $28.2 billion.

Android smartphones, and Verizon€™s growing 4G Long-Term Evolution (LTE) network, certainly also chipped in. While Verizon sold 3.2 million iPhones during the quarter, it introduced five new 4G LTE-enabled devices and sold 2 million of them.

€œWe remain confident in our ability to take advantage of the growth opportunities we see, and we are focused on driving operating efficiencies,€ Verizon CEO Lowell McAdam said in a statement. €œWe are on track with our plans and expect to continue to deliver strong results.€

Verizon finished the quarter with its growing LTE network deployed in 230 markets, covering more than 200 million people. In December, it announced a deal with several cable companies that included the purchase of spectrum€”the industry€™s most valued commodity€”to help it with its LTE expansion plans.

The deal, which included Verizon and the cable companies€”Time Warner, Comcast and Bright House networks€”marketing each others€™ offerings, has come under heavy criticism. Verizon competitors are upset by the intentionally vague details that have so far been shared, and consumer advocates and lawmakers are nervous about what it means for consumers and prices when such competitors become allies.

While a U.S. Senate Subcommittee hearing was held regarding the matter, there was nothing to stop the parties from proceeding, and on April 12 Verizon announced the availability of bundled packages with Time Warner Cable to customers in parts of Ohio, Kansas and North Carolina.

During the quarter, Verizon Enterprise Solutions (VES), a division that combines Verizon cloud, mobility and technology solutions for enterprise customers globally, also unveiled €œstrategic agreements,€ Verizon said in its release, related to developing offerings in the growing areas of mobile health, electronic health records management and secure e-prescribing.

In a separate April 19 release, VES and Orange Business Services announced a new collaborative offering for enterprise mobile conferencing needs. Verizon Immersive Video Exchange customers and Orange Telepresence Community customers will now be able to collaborate with greater numbers of users. The need for such solutions, said VES vice president of product strategy, Mike Palmer, is €œthe consumerization of IT,€ which has driven €œdemand for video in the workplace.€

The iPhone has been at the forefront of this movement, making its way into businesses and replacing even the once gold-standard RIM BlackBerry.

Verizon€™s global enterprise revenues were up 0.9 percent during the quarter, compared to a year ago, while its consumer revenues grew by 1.7 percent during the quarter.

€œOur repositioning of Verizon Enterprise Solutions has better aligned our strengths in high-growth markets, and we expect our enterprise business to contribute even more to overall Wireline revenue growth and profitability over time,€ said McAdam.