Seeking Alpha

Verizon reports healthy wireless margins, sets conservative capex budget

  • 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

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Comments (1)
  • Humble Eagles
    , contributor
    Comments (2159) | Send Message
    YOY smartphone activations down more than 10% from 4Q of '12! I guess the market matured on us? The good news on finances is lower subsidies makes for better numbers. Am I alone in thinking this is very bad for Apple? Sales for iPhones were likely down significantly at VZ and a huge shift from past growth.
    21 Jan 2014, 04:04 PM Reply Like
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