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Wireless Businesses See Growth, Verizon and LG Report
      #32480 - 01/27/09 04:14 PM

With many businesses reporting quarterly results, wireless phone business units seem to performance better than others in companies like Verizon and LG. Here are some highlights of quarterly financial results from Verizon and LG:

Verizon Wireless Delivers Another Strong Performance

In the fourth quarter 2008, Verizon Wireless continued to deliver service ARPU growth, strong customer loyalty, and sustained high margins:

* Organic growth totaled 1.4 million net customer additions, essentially all of which were retail.

* Retail net customer additions totaled 1.2 million. This included a net loss of 122,000 retail customers, resulting primarily from the closing of a previously announced exchange agreement with another carrier. Verizon Wireless had entered into this agreement to comply with conditions imposed in connection with regulatory approval of the company's acquisition of Rural Cellular Corporation, which closed in August 2008.

* Verizon Wireless added 5.8 million organic net new retail customers in 2008 -- expected to be the most of any U.S. wireless carrier.

* At the end of the quarter, Verizon Wireless had 72.1 million total customers.

* Verizon Wireless continued to have a high-quality customer base, with 70.0 million retail customers (not including Alltel) -- the most of any U.S. wireless brand. Following the recently completed Alltel acquisition, Verizon Wireless now serves more than 80 million customers, excluding markets to be divested.

* Verizon Wireless continued to have low churn -- 1.35 percent churn among all customers, and 1.05 percent among the company's retail post-paid customers.

* Verizon Wireless continued its double-digit revenue growth, with total quarterly revenues of $12.8 billion, up 12.3 percent year over year. Full-year revenues were $49.3 billion, up 12.4 percent. Service revenues in the fourth quarter were $11.1 billion, up 12.0 percent year over year, and $42.6 billion for the full year, up 12.2 percent.

* This revenue growth was driven by accretion in ARPU (average monthly revenue per customer), which increased year over year for the 11th consecutive quarter. Total service ARPU of $51.72 was up 1.4 percent year over year, reflecting strong growth in total data ARPU, which was up 27.9 percent over the same period.

* Wireless operating income margin reached 29.7 percent, up 350 basis points on a year- over-year basis. EBITDA (earnings before interest, taxes, depreciation and amortization) margin on service revenues reached 47.2 percent.

LG Mobile Communication Saw Jump in Growth

LG?s Mobile Communication Company reached a company high of KRW 4.49 trillion (USD 3.3 billion) in sales, 34.6% higher than a year earlier. Handset sales accounted for KRW 4.09 trillion (USD 3.0 billion), up 40.3% YoY and 16.5% QoQ. Shipments of handsets recorded 8% growth YoY to 25.7 million, which resulted in a record 100.7 million units being sold in 2008 versus 80.5 million units in 2007. Sales stayed strong in Europe and Asia despite the economic slowdown. Europe saw the introduction of new models including ?Renoir?, an 8-megapixel camera phone, ?Cookie?, a full touchscreen phone and ?LG-KS360?, a QWERTY keypad messaging phone while a QoQ increase in India contributed to Asia?s strong performance. Operating profit margin declined 8.8% YoY and 11.5% QoQ to 5.2% in the handset division due to increased marketing to minimize year-end inventory. While the global economic downturn is expected to continue into 2009, LG?s business target is to grow continuously and expand market share, capturing more of the market for feature-packed premium models, smartphones and mid-to-low end mass volume units.


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