Verizon Reports Loss, Net Adds Increase in Q4, Eyes FiOS Competition
Verizon logged a loss of $2.02 billion in Q4 due to a one-time pension charge of $3.4 billion, the company said Tuesday. But, helped by the iPhone, the carrier added 1.5 million net retail customers, the most it has added in three years.
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Verizon will continue to migrate customers off its EV-DO network and onto its LTE network as it expands to more LTE markets this year, Chief Financial Officer Frank Shammo said during the earnings conference call. The company expects to match LTE coverage to its CDMA coverage by mid-year 2013, earlier than the previous expectation of the end of 2013. The operator had $1.8 billion of wireless capital expenditures for the quarter and $9 billion for 2011, up 6.3 percent from all of 2010. Going forward, Shammo expects international growth in enterprise markets, enabled by cloud services. The carrier added 1.2 million retail postpaid customers in Q4 vs. 882,000 it added in Q3. Retail postpaid churn was 0.94 percent, a slight improvement from the year-ago period. Total retail churn was 1.23 percent, down slightly from the year-ago quarter.
At year-end 2011, smartphones accounted for 44 percent of the Verizon retail postpaid customer phone base, up from 39 percent from Q3. The growth was partly helped by Q4’s promotion of doubling LTE smartphone customers’ data allowances. Shammo said he expects more changes in LTE device costs than in data plan costs in 2012. He reiterated previous comments that the company is working on family data plans. Regarding the company’s spectrum deal with a number of cable companies, Shammo said Verizon expects the Department of Justice and the FCC to complete their reviews by mid-year. Verizon will be collaborating with the cable companies on marketing, Shammo said.
Meanwhile, FiOS will continue to have an important role in Verizon wireline, Shammo said. Verizon plans to compete “vigorously” even with the agreement with the cable companies, he said. Verizon will step up its FiOS innovation and marketing, he said. “I am very optimistic about our FiOS penetration for 2012,” he said. Shammo cited New York as Verizon’s fastest growing FiOS market for new customers. The company has also hit the 40 percent penetration rate for its FiOS TV service in Virginia, he said. During the quarter, Verizon added 194,000 FiOS TV subscribers. While it lost over 100,000 DSL customers, it added 201,000 FiOS Internet subscribers. Verizon continued its labor negotiations with wireline workers unions, Shammo said. The company needs to reconfigure the wireline cost structure and that position hasn’t changed, he said.