Verizon CFO Fran Shammo played it cool when asked about how his company will respond to T-Mobile’s recent “Un-Carrier” moves.
“We are seeing a segment of our base that is responding to the competitive offers,” Shammo said, during a fourth quarter earnings call Tuesday that was broadcast online. “The competitive environment has changed again here in the fourth quarter, and you can expect us to respond accordingly. But on the whole, I think our fourth quarter speaks for itself.”
Shammo went on to say that when device cost is figured into the equation, T-Mobile’s no-contract plans aren’t actually that much different than the postpaid model.
“If you really look at what’s going on…there really isn’t much of a price decrease here,” Shammo said.
Shammo said Verizon’s recently launched Edge upgrade program has done well but is currently generating less than 1 percent of the company’s profitability right now.
Verizon’s wireless business reported an 8 percent increase in service revenues over the same quarter last year, with total revenues for Verizon Wireless up 5.7 percent annually to $21.1 billion during the fourth quarter. Wireless operating income margins hit 29.5 percent, while retail postpaid Average Revenue Per Account (ARPA) continued to climb to $157.21, up from $146.8 in the same quarter last year.
Verizon posted a consolidated profit of just over $5 billion, or $1.76 a share. That compares with the same quarter last year, when Verizon reported a consolidated loss of $4.23 billion.
Verizon Wireless added 1.7 million retail net connections in the fourth quarter, including 1.6 million retail postpaid net connections. The company added 4.1 million net retail postpaid connections in 2013, which excludes acquisitions and adjustments. In all, Verizon Wireless had 35.1 million retail postpaid accounts at the end of the fourth quarter and an average of 2.8 connections per account, up 4.5 percent year over year.
Shammo said tablets continue to be a growth area for Verizon. The company added 1.8 million new Internet devices, which included 1.5 million tablets.
On the matter of Verizon’s acquisition of Intel’s OnCue IPTV service, which was announced today, Shammo said Verizon’s recent purchase of Vodafone’s 45 percent stake in Verizon Wireless would make it easier to bake the product into its existing assets.
“We plan to take that platform and integrate it more deeply with our Verizon Wireless 4G network,” Shammo said.
Shares of Verizon were trading down about 1.5 percent in morning trading Tuesday to $47.62.
Filed Under: Carriers
