The company's wireless tail continues to wag the company dog to higher sales, profits.
Verizon Communications continued to defy the deteriorating nationwide economic decline as its wireless unit and high-speed fiber lines drove the country's second-largest telecommunications company to higher revenue and profits in its fourth quarter.
Just as it has in recent quarters, Verizon Wireless was the star of the company's financial results, with 1.4 million new subscribers added, not including the millions more it's picking up from its recently completed acquisition of Alltel. The company's high-speed FiOS wireline operation, which supplies both TV and high-speed Internet access, also appeared to be breaking out, as 303,000 net FiOS TV and 282,000 net FiOS Internet customers were added in the quarter.
"Verizon has shown that it is able to compete effectively in this economic environment," chairman and CEO Ivan Seidenberg said in a statement Tuesday. "We continued to produce top-line growth, fueled by strong sales volumes for broadband, wireless, and strategic business services."
Verizon Wireless, which is jointly owned by Verizon Communications and Vodafone Group, recorded $11.1 billion in revenue and $3.8 billion in profits for the quarter. Verizon crowed that the wireless operation added what it believes is the most organic net new retail customers in 2008 -- 5.8 million. With the addition of the Alltel subscriber base on Jan. 9, Verizon Wireless leapfrogged AT&T as the nation's largest mobile phone service provider with more than 80 million total subscribers.
Also interesting is the fact that Verizon Wireless continues to add subscribers while the country's other nationwide wireless service provider that uses the same CDMA infrastructure -- Sprint -- hemorrhages subscribers. Sprint, which is expected to announce further subscriber losses when it announces its financials next month, said Monday that it would lay off another 8,000 employees.
Data revenue in Verizon Wireless was a major bright spot, with gains of 44%, equaling 26.8% of all service revenue. "Verizon Wireless had 55.1 million retail data customers at year-end," the company noted, adding that 45 million of those customers had 3G broadband-capable devices.
Verizon also put in a good word for its new BlackBerry Storm handset, which has received mixed reviews from customers. The company said customers were lining up to acquire the Storm even as reports grew that some customers were returning the device.
The glowing numbers for FiOS indicated that the fiber-based wireline service may be catching on in a big way. In recent months, Verizon has launched ambitious campaigns to market the service in major cities, including New York and Washington. The company said FiOS TV service was available to 9.2 million locations by year's end, representing a 57% availability increase over the previous year.
There were a few downers in the report, however. The actual Verizon Wireless subscriber growth declined slightly, and wireline providers Verizon Business and Verizon Telecom each recorded 2.3% year-over-year revenue declines for the fourth quarter. However, wireline data revenue increased nearly 11% in the quarter over the previous year to $5.2 billion. Wireline data revenue includes sales from consumer broadband services, wholesale data transport, and Verizon Business data services.
Verizon observed that it's continuing to build out its global network and recently installed new nodes in Pakistan and Morocco, bringing its edge switch network to 59 countries.
Total revenue for the quarter for Verizon Communications was $24.65 billion (up 3.4% year over year), while net income was $1.24 billion.