Verizon Q4 Earnings Released – 46% of Postpaid Accounts Now on Share Everything, 1.6 Million New Connections

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Verizon released its Q4 2013 financials this morning, reporting $21.1 billion in revenue on the Wireless side of the business, bringing their total for the year up to $81 billion. Big Red saw 8 percent year-over-year growth in the quarter, which gives them five straight quarters of at least 8 percent growth. In other words, it was another solid quarter for the 4G LTE network leader in the U.S. wireless game.

Outside of the financial stuff, I found a couple of other bullet points interesting, to say the least. Verizon reported that they brought in 1.6 million retail postpaid connections during the quarter, which brings their total for the year up to 4.1 million. You may recall T-Mobile at CES claiming that they hit 1.6 million in Q4 as well, bringing their total to 4.4 million on the year. Those were record numbers for T-Mobile with all of their major UnCarrier moves, while Verizon is putting out those numbers with things business as usual. At least that’s how they made it sound. At the end of the year, Verizon stands at 98.7 million post paid connections. 

On another note, Verizon said during their earnings call that 46% of their accounts are now on Share Everything plans. I’m still struggling to pick my jaw up off the floor at that number. In other words, they are having no trouble moving customers off of unlimited data and onto plans that are arguably more expensive with less benefits.

Oh, during the earnings call, Verizon CFO Fran “ShamWow” Shammo also dodged multiple questions about the recent changes by T-Mobile and AT&T. He continued to say “expect us to respond accordingly” as they need to. In other words, they aren’t scared or worried at the moment by what their competitors are up to.

Other notes:

  • 8.8 million smartphones activated in Q4
  • 69% of total data traffic now over Verizon’s 4G LTE network
  • 625,000 postpaid tablet connections made in Q4

Here are the highlights from the Wireless portion of the earnings report:

Wireless Financial Highlights

  • Total revenues were $21.1 billion in fourth-quarter 2013, up 5.7 percent year over year. Service revenues in the quarter totaled $17.7 billion, up 8.0 percent year over year – marking the fifth consecutive quarter of at least 8 percent growth. Retail service revenues grew 7.5 percent year over year, to $17.0 billion.
  • For full-year 2013, total revenues were $81.0 billion, up 6.8 percent over 2012, and service revenues were $69.0 billion in 2013, up 8.3 percent year over year.
  • Retail postpaid ARPA (average revenue per account) grew 7.1 percent over fourth-quarter 2012, to $157.21 per month.
  • In fourth-quarter 2013, wireless operating income margin was 29.5 percent, and segment EBITDA margin on service revenues (non-GAAP) was 47.0 percent, up 560 basis points from fourth-quarter 2012. For full-year 2013, operating income margin was 32.1 percent, up 340 basis points from 2012; segment EBITDA margin was 49.5 percent, up 290 basis points year over year.

Wireless Operational Highlights

  • Verizon Wireless added 1.7 million retail net connections in the fourth quarter, including 1.6 million retail postpaid net connections. The company added 4.1 million net retail postpaid connections in 2013. These additions exclude acquisitions and adjustments.
  • At the end of 2013, the company had 102.8 million retail connections, a 4.7 percent increase year over year – including 96.8 million retail postpaid connections.
  • Verizon Wireless had 35.1 million retail postpaid accounts at the end of the fourth quarter and an average of 2.8 connections per account, up 4.5 percent year over year.
  • At year-end 2013, smartphones accounted for 70 percent of the Verizon Wireless retail postpaid customer phone base, up from 67 percent at the end of third-quarter 2013.
  • Retail postpaid churn was 0.96 percent in fourth-quarter 2013, up 1 basis point year over year and down 1 basis point from third-quarter 2013. Total retail churn was 1.27 percent in fourth-quarter 2013, up 3 basis points year over year.
  • Verizon Wireless has substantially completed deployment of its 4G LTE network, covering more than 99 percent of its current 3G network footprint. The Verizon Wireless 4G LTE network is now available to 97 percent of the U.S. population in more than 500 markets covering nearly 305 million people, including those in areas served by the company’s LTE in Rural America partners.
  • The company continued to enhance its 4G LTE smartphone lineup. In the fourth quarter, Verizon Wireless launched the Nokia Lumia 2520, the Samsung S4 mini and Galaxy III mini, the HTC One Max and the BlackBerry Z30. The company also launched the Verizon Ellipsis Jetpack and Verizon Ellipsis 7 Tablet, and the Delphi Connect with 4G LTE, which offers vehicle diagnostics as well as a mobile hotspot for up to five connected devices.
  • In November, Verizon Wireless opened its first Destination Store at Mall of America in Minneapolis. The store, containing more than 9,000 square feet, features lifestyle zones that help customers discover the latest gadgets, devices and solutions.

Full earnings report.



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