VZW improves metrics, adds 1.5 million new customers: Carrier sees increase in data revenues

Verizon Wireless reported a strong first quarter with a net gain of 1.5 million wireless customers and a nearly 49% increase in data revenues. Verizon Communications Inc. stock was up 1.9% to $37.74 per share after the news.
Verizon Wireless’ first-quarter customer growth was short of the 1.7 million customers it added during the first quarter of 2007, but just slipped past the 1.3 million customers AT&T Mobility last week said it added during the first quarter. Verizon Wireless said it ended the first quarter with 67.2 million customers on its network. AT&T Mobility ended the quarter with 71.3 million customers, while Sprint Nextel Corp. and T-Mobile USA Inc. have yet to post first-quarter results.
Analysts were expecting Verizon Wireless to post around 1.4 million net additions, noting that the continued struggles at Sprint Nextel Corp. helped boost growth at both Verizon Wireless and AT&T Mobility during the quarter.
Verizon Wireless said around 97% of its customer base came from retail (postpaid and prepaid). The remainder came from resale and MVNO sources.
Verizon Wireless’ customer churn ticked up slightly during the quarter from 1.08% last year to 1.19% during the first three months of this year, but was inline with analyst estimates. AT&T Mobility reported last week that its customer churn during the first quarter was 1.7%, hurt by the shutdown of its legacy TDMA network during the quarter.
Aping AT&T Mobility’s results, Verizon Wireless posted a modest increase in average revenue per user (ARPU) during the quarter, growing from $50.73 in 2007 to $51.40 this year. The carrier attributed some of the growth to a 33% year-over-year increase in data ARPU, which hit a company record $11.94 average per user during the first quarter. The company said 48.1 million customers, or nearly 74% of its retail customer base, were data customers. And 38 million retail customers, or more than 58% of Verizon’s retail customer base, had CDMA2000 1x EV-DO devices at the end of the quarter.
Wireless revenues totaled $11.7 billion for the quarter, up 13.2% from the $10.3 billion Verizon Wireless posted during the first quarter of 2007. The growth fell just short of the $11.8 billion in revenues posted by AT&T Mobility during the quarter. Verizon Wireless’ operating income surged nearly 20% year-over-year from$2.7 billion during the first quarter of 2007 to $3.3 billion this year.
“Verizon has weathered the current economic uncertainty with strong first-quarter results,” said Verizon Chairman and CEO Ivan Seidenberg. “I am also confident of our position over the long term because we have further opportunities to drive revenue growth and further opportunities to eliminate costs.
The company ended the period with $35.8 billion in debt, compared with $31.2 billion at the end of last year, and had $5.5 billion in cash. Most of the company’s cash flow, along with $4 billion it borrowed in April, has been used to pay for spectrum licenses the carrier won in the Federal Communications Commission’s 700 MHz spectrum auction.