Once again, the brightest spot in its financial picture was its Verizon Wireless unit, which added 665,000 coveted postpaid subscribers bringing its total customer count to 92.1 million. Verizon Wireless is 45% owned by Vodafone Group so all the benefits of the wireless operation don't flow directly to Verizon Communications. The company added nearly 900,000 prepaid subscribers through plans with third parties.
"We have the network platforms in place, and the product and service innovations in the pipeline, to fuel the next generation of growth in our changing industry," said Verizon chairman and CEO Ivan Seidenberg, in a statement. "Our cost-reduction efforts are gaining momentum, and trends in the global business market are showing signs of stabilization."
In focusing on wireless, global IP and its FiOS fiber service, Verizon has been aggressively downsizing its aging wireline business. Earlier this summer, Verizon spun off mostly-rural operations -- and several thousand employees -- in 14 states to Frontier Communications. Another 10,000 or so employee positions were eliminated via an early buyout program. Consumers have been dropping their wireline telephone service for cell phones and cable phone service with the result that Verizon and the other major telecommunications company -- AT&T -- are seeing a relentless drop in traditional telephone service revenue.
Verizon's headcount is down by nearly 25,000 employees to 210,000.
In an update on the planned launch of its LTE network, Verizon repeated its plan to offer the service in 25-30 communities by the end of the year. The service is expected to debut with data cards and USB dongles initially with voice-ready handsets scheduled to arrive in 2011. The company said it plans to use some of its 4G LTE spectrum to collaborate with rural companies to provide advanced services in underserved areas.
Earlier attempts by Verizon to spin off its wireline services in Hawaii and northern New England states were disastrous, resulting in bankruptcies for the succeeding local companies and poor service for subscribers. Verizon appears to have learned from the experience and is working with Frontier and the FCC to assure that smooth transitions take place among its former rural customers. More than 9,200 Verizon employees were transferred to Frontier.
Verizon said it added 196,000 net new FiOS Internet customers and 174,000 net new FiOS TV customers in the quarter. Earlier this year Verizon said it wouldn't expand the FiOS service beyond its current footprints, although it continues to add customers in regions where the service is currently available. Verizon said its FiOS broadband revenues totaled $1.8 billion in the quarter -- up 20% over the second quarter of 2009.