Verizon Wireless Q2 2012 results
This last quarter Verizon Wireless really blew the lights out. This shows what a combination of a good strategy and good execution can achieve. If in any doubt as to who is winning in the market, look at the charts.
Retail Service Revenue grew 8.6% y/y to $15.2Bn on the back of Retail postpaid revenue growth of 8.3% and retail prepaid revenue growth of 27.2% y/y. Data revenue was up 18.5% y/y to $6.9Bn. Data revenue now accounts for 43.6% of service revenues. Considering the overall economy in the USA, these growth rates are fantastic.
While retail net adds were down to 1,178k from 1,318 in Q2 2011, retail connections still grew 4.9% y/y on the back of very impressive churn numbers.
They added 888k retail postpaid nets and 290k retail prepaid adds, resulting in an increase in retail prepaid base from 5% to 5.6% y/y.
Retail postpaid churn dropped to a very impressive 0.84%, which was down sequentially from 0.96% and from 0.89% y/y. This was the lowest retail postpaid churn in 4 years. Only 7% of retail postpaid base upgraded during the quarter, we suspect this is the iPhone 5 waiting game?
Retail Smartphones grew 13.8% to reach 50% of the base. 5.9m smartphones were sold in Q2 and 73% of postpaid phone sales were smartphones. 41% of smartphone upgrades came from phones, rather than other smartphones. Low churn and more smartphones together drove ARPU improvements. There were 3.2m 4G LTE devices sold in the quarter, bringing the total to 10.9m devices reaching 12.2% of retail postpaid connections.
Retail Postpaid ARPU grew 3.7% y/y to $56.13 while overall phone ARPU grew 4.9%. Retail postpaid data ARPU was up 15.4% y/y to $24.53.
EBITDBA Service margin reached an impressive 49% on the back of $2bn in expense reduction target in 2012.
Great quarter. We assume the iPhone 5 launch will cause significant upgrades and new additions once launched.
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