News
U.S. operator posts improving revenue trends as mobile connections grow, but move to online services dents video customer base
Verizon added a net 603,000 retail postpaid connections at its mobile business in the third quarter of the year, driving revenue and earnings growth, but like arch-rival AT&T, the operator is also losing traditional video customers to online offerings.
The U.S. telco saw operating revenues in the three months to the end of September grow by 2.5% on the same quarter a year ago to US$31.72 billion (€27 billion), while operating income grew by 10.2% to $7.21 billion and EBITDA grew by almost $1 billion to $11.48 billion. Net profit was flat at $3.74 billion.
The mobile business, which accounts for 68% of group turnover, is still experiencing revenue declines, but the trend is upwards. Verizon Wireless posted revenues of $21.6 billion, down 2.4% year-on-year, compared with a decline of 3.9% in Q3 last year. Service revenues declined by 5.1% to $15.84 billion but witnessed a sequential increase for the first time in 12 quarters, Verizon said.
Verizon’s 603,000 net adds included 274,000 phone customer additions, 91,000 tablets, and 238,000 connected devices, of which the largest segment was wearables, the telco said. The additions drove its total retail postpaid connections to 109.7 million.
Wireline revenues grew by 1.1% to $7.66 billion, but fell by 2.7% organically, that is, excluding acquisitions.
Verizon added a net 66,000 Fios Internet connections in Q3, but lost 18,000 Fios video connections, "reflecting the ongoing shift from traditional linear video to over-the-top offerings," it said.
Verizon is itself working on an online TV offering, but the service has apparently been beset with delays; this week Bloomberg reported that it will not hit the market this year, with the telco now targeting a spring launch date.
The move away from traditional video offerings appears to be market-wide, with AT&T last week warning that it will post a net decline of around 90,000 video customers when it reports its Q3 numbers on Tuesday. Factoring in 300,000 net adds to its online service DirecTV Now, AT&T faces a stream of customers turning their backs on traditional video contracts.
