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Verizon Reports Growth in Wireless Business in Q4 Earnings
      #35779 - 01/26/10 09:21 AM

Verizon Communications today reported continued strong cash flow in the fourth quarter 2009, fueled by quarterly growth in strategic areas. Verizon Wireless added a net of 2.2 million total customers, including 1.2 million retail customers, and reported increased data revenue. More highlights for Verizon Wireless business from today's financial reports:

Wireless Customer Growth and Profitability Continue Strong

Verizon Wireless delivered sustained high margins and solid customer growth. In the fourth quarter 2009:

* Verizon Wireless continued to grow its high-quality retail (non-wholesale) customer base. The company added 1.2 million retail net customers in the quarter (almost all postpaid) and 4.6 million retail net customers in the full year, both excluding acquisitions and adjustments.

* Verizon Wireless has the most retail customers of any U.S. wireless provider. The company had 87.5 million retail customers at the end of the fourth quarter, an increase of 25.0 percent year over year and 5.7 percent on a pro forma basis.

* The company also added 1.0 million reseller customers in the fourth quarter, bringing its total number of customers at the end of the quarter to 91.2 million, an increase of 26.6 percent year over year and 7.0 percent on a pro forma basis.

* Retail postpaid churn and total retail churn remained low, at 1.06 percent and 1.44 percent, respectively. Total churn was 1.42 percent.

* Retail service revenues in the quarter totaled $13.2 billion, up 22.5 percent year over year and 5.2 percent on a pro forma basis. Service revenues in the fourth quarter were $13.5 billion, up 22.5 percent and 5.0 percent on a pro forma basis. Total revenues were $15.7 billion, up 22.5 percent year over year and 3.1 percent on a pro forma basis. Full-year revenues were $62.1 billion, up 25.9 percent and 6.1 percent on a pro forma basis.

* Retail service ARPU (average monthly service revenue per user) decreased 2.2 percent year over year and 0.6 percent on a pro forma basis to $50.75. Retail data ARPU increased to $16.24, up 16.1 percent year over year and 20.5 percent on a pro forma basis.

* Wireless operating income margin, adjusted for merger integration and acquisition costs, was 27.3 percent, a decrease of 2.4 percentage points year over year and 1.7 percentage points on a pro forma basis. Adjusted on the same basis, EBITDA (earnings before interest, taxes, depreciation and amortization) margin on service revenues (non-GAAP) was 45.0 percent, a decrease of 2.2 percentage points year over year and 2.5 percentage points on a pro forma basis.


Additional Highlights

* At the end of 2009, retail customers (postpaid and prepaid) represented 96 percent of the company?s base. Verizon Wireless is the nation?s largest wireless provider based on total customers.

* Verizon Wireless continued to lead the industry in cost efficiency. Monthly cash expense per customer (non-GAAP) increased in the fourth quarter 2009 to $27.62 from $26.77 in the fourth quarter 2008 on a pro forma basis. For the full year, cash expense per customer was $27.49, unchanged from 2008 on a pro forma basis.

* Data revenues of $16.0 billion for the full year were up 31 percent over 2008 on a pro forma basis. In the fourth quarter, data revenues were 31.9 percent of all service revenues, up from 26.5 percent in the fourth quarter 2008 on a pro forma basis.

* Verizon Wireless continued to extend the reach of its broadband network, the nation?s largest and most reliable 3G (third-generation) network. Verizon?s 3G network provides more coverage than any other U.S. carrier and is available where more than 285 million people reside.

* In December, the company updated specifications for wireless devices that will run on its LTE 4G (Long Term Evolution, fourth generation) network, which ultimately will connect a full range of electronics and machines, and enable a new class of services, such as online gaming, media sharing and video entertainment. Verizon Wireless plans to launch its 4G network in 25 to 30 markets in 2010 and cover virtually all of its current nationwide 3G footprint by the end of 2013.

* As part of its strategic partnership with Google, Verizon Wireless introduced two Android-based devices in November: the DROID by Motorola and the DROID Eris by HTC. Other 3G smartphones launched during the fourth quarter include the BlackBerry Storm2 and BlackBerry Curve 8530, both with built-in Wi-Fi, and the Samsung Omnia II powered by Windows Mobile 6.5.

* During the fourth quarter, Verizon Wireless customers sent or received more than 162 billion text messages. Customers also sent more than 4 billion picture/video messages and completed more than 38 million music and video downloads.





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