Verizon Communications issued its first-quarter financial report Monday and, as usual, its Verizon Wireless unit paced the company's performance as it added 14.5 million new subscribers, bringing its total wireless subscriber count to 86.6 millon.

The company also reported gains in its FiOS fiber-based network offerings and its strategic business services unit. On the negative site, Verizon reported that its wireline revenue dropped 3.8% as its traditional wireline customers moved to wireless and VoIP offerings.

Most of Verizon's wireless subscriber gains -- 13.2 million of the 14.5 total -- came from its $5.9 billion acquisition of Alltel. "A highlight of the quarter was our successful completion of the Alltel acquisition," Verizon chairman and CEO Ivan Seidenberg said in a statement. "We quickly began integration efforts and we are aggressively pursuing synergies."

The results underscored the neck-and-neck race Verizon is engaged in with AT&T, which added 1.2 million net new subscribers to Verizon Wireless' 1.3 million. AT&T has been basing its wireless strategy primarily on its exclusive deal with Apple to market the iPhone in the United States.

Verizon and AT&T are each a conglomeration of regional Bell operating companies formed when the original AT&T's Bell System was broken up more than two decades ago. Verizon and AT&T still don't compete in many geographical areas, but they aggressively slug it out in the wireless arena. Verizon Wireless is co-owned by majority owner Verizon Communications and the Vodafone Group.

Verizon's FiOS fiber service is increasingly competing with cable TV and Internet providers, and the first-quarter results show that Verizon added 299,000 FiOS customers and 298,000 FiOS Internet customers, indicating that most of the company's FiOS customers were signing up for the service in bundles offering at least two Verizon services.

Verizon's strategic business services also broke out in the quarter, delivering $1.5 billion in revenue, representing a 7.5% gain. The unit provides IP services, managed services, Ethernet, and security solutions, primarily to businesses.

Verizon's total revenue for the quarter was $3.21 billion -- up from $3.5 billion in the prior year's first quarter.

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