IP Democracy: Verizon to Put Mobile Service in Bundles

Verizon will kick off tomorrow (January 30) bundled wireless service, which will be incorporated into the company’s existing line-up of voice, video and data services. Speaking during the company’s Q4 06 earnings call, President and COO Denny Strigl said “tomorrow we will announce the bundling of wireless into consumer plans.”

With the incorporation of a mobile voice and mobile video (Verizon Wireless has deals with YouTube, Revver and CBS to offer “TV” services on mobile devices) component into its packages of voice/video/data services, Verizon becomes the second major telco to push a combined landline/mobile package to consumers. Earlier this month, AT&T, fresh from its acquisition of BellSouth and the remaining portion of Cingular it didn’t already own, unveiled what it calls the Unity Plan, an unlimited calling package for customers who sign up for both AT&T landline and wireless services.

The move comes at just the right time for Verizon — the telco’s Q4 06 performance was tepid at best. Total adjusted revenue (taking into account asset sales and the acquisition of MCI) grew by 4% year-over-year to $22.6 billion while net income ticked up by only 2% to $1.8 billion.

Broadband subscriptions, including the company’s turbo-charged fiber-to-the-premises FiOS service, continued to grow, but at a much slower rate, even as Verizon continued to lose local access lines at a rapid clip. During the quarter, Verizon lost 920,000 local access lines and gained 409,000 broadband customers, a run-rate down 33% from the 613,000 net broadband subscriber additions posted in Q4 05.

By quarter’s end, Verizon served 687,000 FiOS high-speed customers, up 165,000 sequentially. Despite the growth, penetration of homes capable of buying the service stayed steady at 14%.

On the video front, Verizon ended the quarter with 207,000 FiOS video customers, up 89,000 over Q3 06 levels, by far the biggest quarter for FiOS TV growth since Verizon began reporting FiOS video customer counts. But, Verizon nearly doubled the homes capable of buying FiOS TV during the quarter, driving the overall penetration rate for the multichannel video service down from 10% at the end of Q3 06 to 8% at the end of Q4 06.

The telco’s DBS partnership with DirecTV, which enables Verizon to offer a video component in its service bundles in areas outside FiOS deployments, continued to inch upward. At the end of the quarter, Verizon served 540,000 DBS customers, up 44,000 sequentially.

Without a doubt, Verizon Wireless remains the big growth driver for the telco. By the end of the quarter, Verizon Wireless served 59.1 million mobile wireless customers, up 2.4 million sequentially, a run-rate 15% higher than the net Verizon Wireless additions posted during Q4 05.

Advanced services, such as text messaging, fueled even more accelerated revenue growth. Verizon Wireless revenues rose 16% year-over-year to $10.1 billion. Data revenues, however, soared 88% year-over-year to $1.4 billion as the number of customers using these advanced features climbed to 34.3 million, up 44% year-over-year.

(Reprinted from today’s IP Media Monitor.)

Posted by Cynthia Brumfield on January 29, 2007 4:22 PM to IP Democracy