October 27, 2005

Verizon Wireless continued to dominate the market during the third quarter, by adding more than 1.9 million net new customers.

The strong growth was a 15-percent improvement compared with the 1.7 million the carrier added last year and handily trumped the 969,000 direct customers added by Sprint Nextel Corp. and the 867,000 customers added by larger rival Cingular Wireless L.L.C.

Verizon Wireless noted that it has added more than 7 million customers through the first nine months of this year, and that it ended the third quarter with 49.3 million total subscribers. Cingular ended the third quarter with 52.3 million total subscribers, while Sprint Nextel served 38 million direct customers at the end of the quarter.

Verizon Wireless also reported that more than 1.6 million customers owned CDMA2000 1x EV-DO capable devices at the end of the quarter.

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The numbers include the carrier's business-focused BroadbandAccess and its consumer-oriented Vcast services.

Verizon Wireless' industry-low churn tumbled from 1.5 percent during the third quarter of 2004 to 1.3 percent this year. Customer turnover did increase sequentially from the 1.2 percent the carrier reported during the second quarter of this year.

Verizon Wireless posted mixed average revenue per user results. The carrier's ARPU dropped 2.8 percent year-over-year to $50.13 during the third quarter, but increased 1.4 percent from the second quarter of this year. Analysts have cited the strong adoption of family plans as a reason for the ARPU decline, but also for boosting Verizon Wireless' customer growth.

Despite the drop in recurring revenues, Verizon Wireless' total revenues surged more than 14 percent from $7.3 billion during the third quarter of 2004 to $8.4 billion this year.

Operating margins dropped from 22.5 percent last year to 21.8 percent this year, while segment income jumped 20 percent from $478 million to $574 million.

Source: RCR News