Verizon reports healthy wireless margins, sets conservative capex budget

|About: Verizon Communications (VZ)|By:, SA News Editor

In what's likely evidence of more share gains, Verizon (VZ -1.3%) had 1.7M retail wireless net adds in seasonally strong Q4, of which 1.6M were postpaid. That's up from 1.1M and 927K in Q3, albeit down from 2.2M and 2.1M a year ago - higher penetrations rates are contributing to slower growth.

126K and 96K FiOS Internet and TV subs were respectively added. That's down from 173K and 135K in Q3, and 144K and 134K a year ago. Verizon has slowed down the pace of its FiOS buildout.

Subscriber totals: 102.8M wireless retail (96.8M potapaid), 6.1M FiOS Internet, 5.3M FiOS TV.

Wireless service revenue +8% Y/Y vs. +8.4% in Q3. But wireless op. margin rose to 29.5% from 24% a year ago, and wireless EBITDA margin to 47% from 41.4%.

A contributing factor: Smartphone activations fell 10.2% Y/Y to 8.8M, and Verizon's phone upgrade rate fell to 7.4% from 8.8% a year ago. Like other U.S. carriers, Verizon has been looking for ways to cut phone subsidy expenses. For the first time, iPhone sales aren't being broken out.

2013 capex was $16.6B (14% of revenue). Verizon has set a conservative 2014 capex budget of $16.5B-$17B.

Q4 results, PR