TBR Verizon Commentary - Q3 2011 - Sponsored Whitepaper

SMARTPHONES AND LTE DRIVE STRONG REVENUE AND SUBSCRIBER GROWTH FOR VERIZON WIRELESS

Author: Ken Hyers, Senior Analyst Published: 10.21.11

Smartphones and 4G help Verizon Wireless drive subscriber and revenue growth in 3Q11

Verizon Wireless added 1.3 million net new customers in the third quarter of 2011, as customers snapped up new smartphones running on the company's 4G LTE network. Verizon added 882,000 postpaid contract customers in the quarter, nearly three times as many as AT&T reported for the same period. Strong smartphone and 4G device sales drove healthy wireless service revenue growth of 6.1% year-to-year and 15 billion in total service revenue for the wireless business. Verizon sold 5.6 million smartphones in 3Q11, over half of which were Android phones. Verizon's diversified handset lineup, which includes the iPhone 4S, is driving healthy subscriber additions.

Verizon's 4G LTE network has become a key driver of both revenue and subscriber growth. With 13 LTE devices, including five smartphones, Verizon's strategy of providing a broad portfolio of 4G devices paid dividends as more customers signed up for 4G data plans. It sold 1.4 million 4G devices in the quarter, including smartphones, tablets, and PC cards. 4G data devices, such as tablets and PC cards, generated lower average revenue per device of $49, but with lower subsidies than smartphones, actually generate profits more quickly than typical phone sales.