Verizon Prepping For iPhone Debut - InformationWeek

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1/25/2011
05:05 PM
Eric Ogren
Eric Ogren
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Verizon Prepping For iPhone Debut

Verizon Wireless says its network -- and its piggy bank -- will be ready for the Apple iPhone 4 launch on February 3.

Verizon Wireless says its network -- and its piggy bank -- will be ready for the Apple iPhone 4 launch on February 3.Verizon Wireless reported its fourth quarter earnings today, which showed that the nation's largest network operator grew to 94.1 million total customers. Verizon Wireless added just 955,000 net new customers, with 872,000 of them the profit-lining, post-paid type.

Verizon noted that 26% of its customer base is now using smartphones. Of the 872,000 post-paid customers that signed up during the fourth quarter, 75% bought smartphones. (Apparently none of them suspected that Verizon might offer the iPhone early this year.)

Post-paid ARPU grew 2.5% over the year-ago quarter to $53.50 and data ARPU shot up 19.3% to $19.97. In total, revenue sunk 2.6% to $26.4 billion compared to the year-ago quarter.

Verizon Wireless talked up its 3G and 4G networks, noting that it continues to invest in both. It said that its 3G network, which has been bulked up ahead of the Apple iPhone 4 debut next month, covers 290 million Americans. Verizon's 4G LTE network will expand to 140 markets by the end of 2011. The company started selling the Apple iPad in November as a way to train is sales associates with Apple's way of doing business. It also added some 3,000 customer service reps.

The iPhone launches on February 3 to existing Verizon Wireless customers, and February 10 to everyone else. The subsidized prices are $199 for the 16GB model and $299 for the 32GB model. Looking ahead, Verizon is basing on its 2011 yearly guidance on the prediction it will sell 11 million iPhones this year. Verizon says that figure is "the street's" estimate, not Verizon's. Verizon wouldn't offer its own, internal projections for iPhone sales.

Verizon has taken a few interesting steps ahead of the iPhone's launch. Verizon CEO Lowell McAdam today said that the company will drop its $15/month data plan by the end of the January. (Keep in mind, Verizon introduced this cheaper data plan option only three months ago.) The only data plan available to iPhone customers at launch will be an unlimited plan for $30 per month. In other words, Verizon isn't taking the chance that iPhone users will sign up at the lower data plan offering and instead it is forcing them to tack on the maximum monthly fee.

By way of comparison, AT&T offers 250MB for $15 per month and 2GB for $25 per month for the iPhone 4. AT&T actually lowered data plan pricing ahead of the iPhone 4 launch last June.

McAdam noted that the $30 unlimited data plan offering won't be available forever. In fact, Verizon Wireless will revert to using a tiered system (probably after the initial wave of iPhone sign-ups).

With its network and bank account prepped for the iPhone 4, Verizon must be foaming at the mouth for next week's launch.

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