Verizon hits Q1 numbers, wireless growth slows

Verizon Wireless came out just ahead of revenue and income targets for the first quarter, reporting the highest growth in wireless sales in three years due to increased smartphone usage. The company added 734,000 subscribers during the quarter in contrast to the same period last year, when its customer ranks swelled by 1.78 million, driven by demand for the iPhone 4S.

One bright spot was average per user revenue, which Verizon boosted by 3.6% for post-paid accounts, while data service sales improved by 16%. This is a key metric that all mobile carriers are trying to push upward.

Sales of Apple’s phone remain robust, accounting for about half of the 6.3 million smartphones Verizon sold during the quarter. This was down from 55% in the fourth quarter of 2011, but smartphone sales were higher overall then, totaling 7.7 million.

Shifting fewer iPhones this quarter actually helped the company’s results because it lowered the amount Verizon had to pay to Apple in subsidies. The iPhone 4S is priced at around $200 for consumers, but carriers pay closer to $600 for each device they buy from Apple in hopes of making up the difference and then some in subscription and usage fees over the course of contract.

Despite the iPhone’s dominance of Verizon’s handset selection, the company isn’t putting all of its eggs into one basket. Company CFO Fran Shammo noted during the earnings call today that it was also supportive of Microsoft phones. He said that Verizon hopes to “do the same thing” with the Windows Phone platform that it did with Google’s Android platform. Before it began selling the iPhone late last year, Verizon was the key supporter of Android with the well-received Droid product line it developed with Motorola Mobility.


Photo courtesy of Eric Hauser, used under a Creative Commons license.

Jason Cella

Jason Cella has covered the IT and telecommunications industries as an editor and writer at Hoover's since 1998.

Read more articles by Jason Cella.

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