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Verizon Wireless gained a record-setting 2.2 million new subscribers during the fourth quarter of 2012 and announced annual operating revenues that for the first time exceeded $30 billion. But the impacts of October’s Hurricane Sandy and recurring pension liability charges ultimately led to a net loss of $4.23 billion, versus the $2 billion loss of the previous year’s fourth quarter.
Executives said during a Jan. 22 earnings call that they were positive about the prospects of the carrier moving ahead.
“We’re making all the right strategic moves. … I’m confident that we can improve our profit in 2013 over 2012,” CFO and Executive Vice President Fran Shammo said during the call.
Verizon has by far the largest Long Term Evolution (LTE) network among its peers—it now offers LTE to more than 273 million people in 476 U.S. markets—and as of January, nearly 50 percent of its data traffic was running over this highly efficient network. Verizon is also experiencing a strong response to its shared-data plans, its smartphone portfolio and its Fios Internet and television services.
Despite Hurricane Sandy, it added record numbers of Fios customers during the fourth quarter—144,999 Internet and 134,000 video customers—which Shammo said suggested that the storm helped to emphasize the appeal and strength of the product.
“Fiber optics doesn’t care if it’s under water,” said Shammo.
Smartphones now account for more than 58 percent of its postpaid customer phone base, up from 53 percent at the end of the third quarter.
Shammo said that 23 percent of accounts are now on shared data plans, and that it was short-sighted to look only at smartphone figures. “If you look at our Internet device category, including tablets, we had one of our strongest quarters of other devices attachment, and all of this drives our revenues.”
He added that an uptick in data is expected.
“What we’re seeing is, 30 percent of these customers coming to us on smartphones are new to Verizon. They’re coming in at the lowest option, and in six months they double the devices they’re attaching.”
Technology Business Research analyst Eric Costa, in a Jan. 22 research note, said Verizon’s Share Everything plans are already beginning to pay off. The plans, he wrote, “allow Verizon to begin to capture a larger portion of connected devices. This currently consists of primarily tablets, yet future connected devices will cover multiple different verticals and open up new revenue streams for Verizon.”
Costa added that early this month Verizon announced it will bring the plans to its business users as well.
“These plans will target Verizon’s small business accounts and will operate similarly to consumer plans, with a single data allotment shared among the employees and the different devices,” wrote Costa. “This will allow Verizon to better monetize its business segment and drive increased revenue through the additional devices that will be connected to the network.”
Verizon last year completed a controversial deal with several cable companies that included Verizon purchasing spectrum from them and the cable companies bundling their offerings with some of Verizon’s. The spectrum received in that deal will begin going live in mid-2013. During the third quarter, Verizon also closed a deal with T-Mobile, in which the carriers swapped some portions of spectrum.
Moving forward, said Shammo, “We’re in a very good position with our LTE network and with our license holdings.”