Data Hungry Droids Grow Verizon Revenues

13 Comments

Despite AT&T’s impressive subscriber gains, Verizon Wireless (s vz) remains the largest U.S. carrier in terms of subscribers, according to the company’s quarterly results, announced this morning. The carrier has 92.1 million customers, up 5 percent from a year ago and slightly ahead of the 90.1 million subscribers AT&T (s t) announced yesterday. Even without an iPhone to offer, Verizon actually pulled further away from AT&T for the overall subscriber lead by adding more postpaid customers in the quarter than its close competitor did.

How is Verizon driving such subscriber growth? There are several reasons, but in a word: Droid. First with the Motorola Droid (s mot) in late 2009 and now with the HTC Incredible Droid and new Motorola Droid X — both of which are sold out — Verizon no longer lags behind AT&T in terms of competitive handset offerings. Pairing powerful Google Android handsets with a solid 3G data network retains and adds customers: Verizon gained 665,000 postpaid subscribers, while postpaid churn was 0.94 percent. It likely didn’t hurt that Verizon increased its ETF fee to $350 last year either — fewer customers will defect when the barriers to do so become more costly.

Those Droid customers are data hungry, too. Verizon recently said Droid X customers are using five times the data that Verizon sees on other handsets. Given the large display, which I found great for browsing on my review unit, I’m not surprised the device is a data hog. With Droid X and the like hungry for data, Verizon says average data revenue per user is up 4 percent over the prior quarter and overall wireless data revenues increased 23.8 percent from a year ago. A closer look at Verizon’s numbers show a net loss, but the company took $2.3 billion in pre-tax charges associated with various divestment and workforce reduction activities.

We keep hearing constant rumors of a mythical Verizon iPhone and in a recent survey, a majority of Verizon customers indicated they would buy such a unicorn. But it’s safe to say that after three quarters of Android offerings, Verizon has found a way to survive and grow even without Apple’s coveted handset.

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13 Comments

mark

From an ethics standpoint, data caps suck. When I bought my droid in March, I was actually just looking for a regular phone. But, to my surprise, there were only 3 or 4 phones in the store that did NOT require a data plan.

So, with a bit of prodding from the salesman, I took the leap into the world of smartphones.

Forward ahead 3 months…

My once blistering web browsing speed has been brought to a crawl; verizon admitting that my area was suffering from overcrowding on the network.

So, we can point the blame at verizon, and even arrive at the conclusion that this was verizons plan all along.

So, regardless of our situation, the only fair way to decide who gets the data use is to let the market decide. Its fairly simple economics. And I can damn sure bet that once data comes with a price, those of us who need to use it (for work, rather than video games,) there will be no more “overcrowded networks.”

Just my 2 cents

Lutz Engelhardt

Sorry, but “HTC Incredible Droid” is wrong and dangerous. Droid is a brandmark of Motorola. Don’t risk to be suited bei Motorola or HTC for this!

Se7en

AT&T activated 3.2 million iPhones…no word from Verizon how many Droids they activated last quarter?

Paul

Droid X users consuming 5x the data used by users of other handsets. A week after launch. Could have been written as “users consume lots of data as they download initial apps onto their new phones.”

Kevin C. Tofel

That’s true enough, although the Incredible should be part of that comparison, in which case the same logic would apply. Hard to say without more info over the longer term, but good point.

atmabus

Looks like android has really helped VZ. It will be interesting to see if Android based phones catch up with the Iphone phenomenon. AT&T already announced pay per usage for data, will Verizon move away from “all you can eat” model as well ?

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