ADVFN - Advanced Financial Network.
HOME» NYSE » V » VZ Stock Price » VZ Stock News

Verizon Share News

 Verizon Communications Stock Price
VZ Stock Price
 Verizon Communications Stock Chart
VZ Stock Chart
 Verizon Communications Stock News
VZ Stock News
 Verizon Communications Company Information
VZ Company Information
 Verizon Communications Stock Trades
VZ Stock Trades

Slow Wireless Subscriber Growth Highlights Industry Challenges

By Thomas Gryta The slow growth in contract customers at U.S. wireless companies in the second quarter points to anticipation of a new Apple Inc. (AAPL) iPhone but also indicates the withering inertia of an industry. The four major U.S. wireless carriers--making up the vast majority of wireless subscriptions--added a net 405,000 customers under contract in the quarter, less than half of the amount in the same quarter a year ago. Verizon Wireless, AT&T Inc. (T), Sprint Nextel Corp. (S) and Deutsche Telekom AG's (DTE.XE, DTEGY) T-Mobile USA now have about 212.4 million such subscribers in the U.S. While many people may be waiting until the second half of the year to buy, the overall population is getting saturated with phones and the growth pipeline has slowed to a trickle, forcing the major players to grow wireless revenue by getting customers to pay for additional services, which they have been successful in doing. For example, AT&T last month reported the company's highest-ever margins for its wireless service. "That helps show the value of our smartphone base," AT&T Chief Financial Officer John Stephens said, noting that smartphone owners, on average, spend twice as much for coverage than users of non-smartphone devices. Overall, in the first half of the year, the carriers added fewer than 400,000 contract customers--the most profitable customers--compared with more than 1.2 million in the same period last year. The industry expects the second half to be stronger with the projected launch of a new iPhone, which is expected to run on next-generation wireless data networks. "That certainly has an impact on people waiting to sign up for new contracts," Stifel Nicolaus analyst Christopher King said. He said subscriber growth in the fourth quarter of 2011--hitting 1.4 million at the major carriers--would be hard to beat, but the new iPhone could make it possible. Mr. King estimated mobile-phone penetration in the U.S. is now 104%, meaning some people own more than one device. Craig Moffett, an analyst with Sanford Bernstein, noted that total contract subscriber growth of the industry dropped below 10% in 2006, below 5% in 2008 and is now at 1% annually. He added that postpaid wireless subscriptions are growing slower than pay-TV subscriptions, an industry that has gotten attention for people trying to "cut the cord" and use those services less. Despite the slowness, the wireless companies are managing to grow margins and report record profits. Verizon Wireless reported earnings before interest, tax, depreciation and amortization growth of 15.8% to $7.7 billion in the second quarter. Verizon Wireless is a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group Plc. (VOD VOD.LN). For the past six quarters, the major carriers have generally been able to grow their average revenue per user, a closely watched industry metric also know as ARPU. The growth hasn't come from price increases, but rather from customers already under contract converting from simpler phones to data-consuming smart phones, which are more profitable and generally raise monthly bills, Mr. Moffett said. For example, the analyst noted that AT&T isn't seeing any growth in ARPU for feature-phone subscribers or ARPU for smartphone subscribers, which means the overall ARPU growth comes from the conversion of customers to smartphones. At the end of June, 62% of AT&T's wireless customers used smartphones. Also, some users who don't want a smartphone are simply switching to a prepaid phone with basic features. Their exit from the contract rolls aids ARPU growth because their bills were generally lower than smartphone users. But as the conversion to smartphones becomes more mature, companies will have to focus on growing their market share, getting customers to add more devices to their accounts, and raising prices in order to continue squeezing out revenue growth. Both Verizon Wireless and AT&T recently unveiled data plans that raise prices for many consumers and make it easier to add internet devices like an iPad to an account. On the market-share front, Verizon has been winning that battle. Over the past six quarters, its share of contract customers from the major carriers rose to 41.8% from 40.2%. AT&T managed to gain ground during that period, up just 0.2 percentage point to 32.8%, while Sprint and T-Mobile lost ground, to 15.4% and 10%, respectively. Write to Thomas Gryta at thomas.gryta@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Stock News for Verizon (VZ)
DateTimeHeadline
08/14/201417:40:22Berkshire Hathaway Continued Investing in Media in 2Q
08/14/201417:25:28Berkshire Hathaway Continued Investing in Media in Second Quarter
08/07/201409:40:59Deutsche Telekom Still Waiting for Acceptable T-Mobile Bid -Update
08/06/201409:20:14Sprint Confirms CEO Change
07/23/201419:42:43Have Big-Screen Smartphones Crashed the Tablet Party?
07/22/201420:02:25As Phone Growth Slows, Carriers Turn to Tablets
07/22/201409:53:34MARKET SNAPSHOT: U.S. Stocks Open Higher; CPI In Line With Forecasts
07/22/201409:46:18U.S. Hot Stocks: Hot Stocks to Watch
07/22/201409:09:55MARKET SNAPSHOT: U.S. Stocks: Futures Gain On Inflation Data
07/22/201408:12:35MARKET SNAPSHOT: U.S. Stocks: Futures Rise Ahead Of Inflation...
07/22/201405:57:21MARKET SNAPSHOT: U.S. Stocks: Futures Climb Ahead Of Inflation...
07/21/201417:10:46Netflix Earnings More Than Double
07/21/201403:20:37MARKET SNAPSHOT: Small Caps' Slump, Ukraine Fears May Hold Up...
06/25/201419:01:56IBM, Lenovo Tackle Security Worries About Server Deal
06/16/201418:30:35Correction to Level 3-TW Telecom 5th Update
06/16/201414:15:40Level 3 to Buy TW Telecom for $5.7 Billion -- 5th Update
06/13/201416:17:32FCC Probes Internet Traffic Slowdowns -- 2nd Update
06/13/201414:24:34FCC Probes Internet Traffic Slowdowns -- Update
06/13/201414:00:09FCC Probes Internet Traffic Slowdowns
06/06/201415:39:16Vodafone Says Phones on Its Global Network Are Tapped -- 5th...

Verizon and other New York Stock Exchange stock quotes are delayed by at least 20 minutes.
All other stock price data is delayed by at least 15 minutes unless otherwise stated.
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Contact Us | Copyright 1999-2007 ADVFN PLC. | Privacy Policy | Investment Warning | Data accreditations | Investor Relations

ADVFNADVFN ItalyADVFN GermanyADVFN FranceADVFN BrazilADVFN JapanADVFN UKADVFN US noad