Verizon Wireless added fewer new customers in the fourth quarter but sales rose on increased data usage, the company said in its earnings announcement today.
The company added just 955,000 new customers in the fourth quarter of 2010, less than half of the 2.16 million customers it added during the same period last year. The company’s fourth-quarter net adds included 872,000 new postpaid customers, more than 75 percent of which were smartphone users.
Verizon’s executives didn’t shed any light on the numbers during the company’s earnings call, but it’s becoming harder for wireless operators to get new customers due to the country’s rising wireless penetration rate, which currently hovers around 90 percent.
Verizon said it added 65,000 LTE customers in the last three weeks of December after the network launched. The company now has 94.1 million customers and 8.1 million “other connections” for accounts in the machine-to-machine and telematics markets.
Verizon said smartphone users are comprising a larger part of its postpaid customer base. More than a quarter of its retail postpaid customer base used smartphones in the fourth quarter, up from 15 percent during the same period last year. This helped drive data revenue up nearly 23 percent to $5 billion, and total sales grew about 5 percent to $16.1 billion.
Verizon’s wireless subscribers sent and received more than 180 billion text messages, 4.5 billion multimedia messages and 20 million music and video downloads during the fourth quarter.
Data ARPU grew nearly 20 percent to $19.97 while retail postpaid ARPU grew slightly to $53.50. Total customer churn improved to 1.34 percent, with retail postpaid churn coming in at 1.01 percent.
Verizon executives shied away from giving a detailed forecast for iPhone sales, which begin Feb. 10. Verizon Communications CFO Fran Shammo said the company largely agreed with a consensus analyst estimate of 11 million iPhone sales for 2011, and said the iPhone could raise per-share profits by 5 to 8 percent over the next year if the consensus estimate is accurate.
Shammo emphasized that Verizon was focused on a flawless launch for the iPhone. The company has hired more than 3,000 people trained to handle customer service for the iPhone and iPad, and Shammo said the company has been “preparing the network over the past year for expansion in anticipation of the iPhone.”
On a consolidated basis, Verizon’s wireless, FiOS and enterprise segments posted operating revenues of $26.4 billion for the fourth quarter, a decrease of 2.6 percent over last year. The company as a whole made $4.65 billion, or 93 cents per share, up from $2.37 billion, or 22 cents per share, last year. The increase largely attributed to a recent change in the way Verizon accounts for its pension and post-retirement benefits, which added 50 cents per share to the company’s fourth quarter profits.
Verizon Communications’ stock was up slightly in morning trading on the New York Stock Exchange, rising 1.87 percent to $35.90 as of 9:40 a.m. Central.