Verizon Makes A Killing On Wireless Data Revenue - InformationWeek

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1/28/2008
04:26 PM
Eric Ogren
Eric Ogren
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Verizon Makes A Killing On Wireless Data Revenue

Verizon Wireless posted its fourth-quarter and full-year results for 2007 today. The numbers don't quite match those of AT&T, but they're not too shabby. Among the many positives is the fact that its data revenue for the year jumped 65%.

Verizon Wireless posted its fourth-quarter and full-year results for 2007 today. The numbers don't quite match those of AT&T, but they're not too shabby. Among the many positives is the fact that its data revenue for the year jumped 65%.Here's a rundown of all the factoids and figurines.

Verizon added a total net of 2 million customers in the fourth quarter and experienced churn of just 1.2%. For the entire year, Verizon Wireless added 6.7 million customers, representing a 13.7% drop from 2006. Even so, it ended 2007 with 65.7 million customers.

Verizon soaked in some $7.4 billion in data revenue for the entire year, a 65% increase over 2006. In the fourth quarter, data amounted to 21.3% of Verizon's revenue, which is an increase of 15.8% over 4Q '06. The wireless unit of Verizon brought in $44 billion for the year, which jumped up 15.3% compared with 2006.

Verizon didn't offer a more detailed look at exactly which services accounted for what earnings. I'd very much like to see a breakdown of messaging revenue versus mobile Web, Mobile TV, V Cast Music, LBS, and other data services to see what Verizon's customers are really spending their money on. According to Verizon, each customer's data ARPU was just $11 per month out of the total ARPU of $51. To me, that means most people are subscribing to a cheaper messaging bundle and perhaps downloading a song or game here and there. This would be casual, not habitual, use of mobile data services. Obviously this is an average, and people are spending above and below the $11 per month figure.

Verizon president Denny Strigl noted during the earnings call that, "Our ARPU has been driven in large part by growth in data ARPU. We will see strong data growth going forward into 2008."

With more data-capable handsets in its lineup, such as the LG Voyager and BlackBerry devices, I am sure Verizon Wireless will make good on that prediction from Strigl.

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