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Apr. 24, 2010

Verizon Wireless said it added over 1.5 million new customers to its network during Q1. The news was ahead of the reduced estimate of 1.515 million net new customers' forecast by wireless industry analysts and an increase compared with the 1.277 million customers Verizon Wireless added last year for the corresponding period.

However, Verizon's numbers did fall short of the 1.9 million net activations reported yesterday by the industry’s No. 2 operator, AT&T Mobility.

AT&T also reported a steep drop in direct postpaid net additions falling from 875,000 customers during the first quarter of last year to 512,000 subscribers so far in 2010.

Despite the drop in direct customer additions, Verizon Wireless reported that its retail churn rate improved slightly from almsot 1.5 percent last year to 1.46 percent this year, while overall churn rates dropped from 1.47 percent to 1.4 percent.

Verizon Wireless’ year-over-year boost in new customer additions was driven by indirect customer sales, or those that signed up for services through a 3rd-party that lease capacity on Verizon’s network.

The wireless carrier noted that direct customer additions plunged from 1.26 million during the first quarter of last year to just 288,000 in 2010, while 1.3 million customers were added through reseller partners.

Verizon Wireless said it ended the quarter with a little under 93 million subscribers on its network, including 87.8 million direct customers, and that it also counted 7.3 million other connections that include machine-to-machine, e-readers and telematics bringing the total number of connections on its network to a little over 100 million.

Verizon Wireless’ service revenues managed to increase to over 5.73 percent year-over-year to $13.84 billion, almost $1 billion more than the $12.85 billion posted by AT&T Mobility.

Verizon Wireless’ total revenues, including equipment sales, was up 4.4 percent to $15.78 billion, and accounted for almost 59 percent of parent company Verizon Communications’ revenues for the same quarter.

Retail service ARPU (average revenue per user) remained flat year-over-year at $50.94, though data revenues increased about 19.8 percent of that average to $17.07. This result indicates that Verizon Wireless’ average retail customer is paying about $34.92 per month for voice services.

Verizon’s cash cost per user improved slightly from $27.39 during the first quarter of last year to $27.09 in 2010.

Overall, data services accounted for about 31.9 percent of the wireless carrier’s total revenues, an increase from the less than 28 percent reported for the first quarter of last year.

With the industry’s two largest mobile service carriers now having reported their first quarter results, the wait now begins for the smaller players to post their numbers.

On average, there is some expectation that while the smaller carriers, including Sprint Nextel, T-Mobile USA, MetroPCS and Leap Wireless could see some slowing of customer growth, their overall greater reliance on the still robust no-contract segment could still buffer some of the drop in net new subscriber additions.

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Source: Verizon Wireless.