The last three months of 2003 proved fruitful for the country’s largest and smallest nationwide operators as Verizon Wireless and T-Mobile USA Inc. posted subscriber results well ahead of their competitors and provided a solid conclusion to what was a strong year of growth for both carriers.
With Nextel Communications Inc. still to report fourth-quarter results, Verizon Wireless posted the quarter’s strongest customer growth numbers with nearly 1.5 million net subscriber additions during the quarter, which the carrier said was the highest quarterly growth in its history and a 54-percent increase compared with the 970,000 subscribers the carrier added during the fourth quarter of 2002.
Analysts were expecting Verizon Wireless to post strong quarterly growth results, citing the carrier’s perceived superior network quality and subsequent net gain in customers taking advantage of wireless local number portability to switch to Verizon Wireless beginning Nov. 24.
Verizon Wireless’ strong fourth-quarter growth helped push the carrier’s full-year growth past 5 million net subscriber additions, which also was a company record, and a 62-percent increase compared with the 3.1 million subscribers it added in 2002. Its total customer base now stands at an industry-leading 37.5 million customers.
Fueling Verizon Wireless’ strong customer growth was lower-than-expected customer churn including a 1.7-percent blended churn rate during the fourth quarter and 1.8-percent churn rate for the full year. Both results were significant improvements compared with the 2.1-percent churn reported during the fourth quarter of 2002 and 2.3-percent churn for all of 2002.
Despite relatively flat average revenue per user results, Verizon Wireless’ total revenues surged nearly 15 percent during the fourth quarter, from $5.2 billion in 2002 to $6 billion last year, while full-year revenues jumped more than 15 percent from $19.5 billion in 2002 to $22.5 billion last year.
While still a small percentage of total revenues, Verizon Wireless noted data services accounted for more than 3 percent of total service revenues during the fourth quarter and more than 2 percent of total service revenues for the year. The carrier added its customers sent more than 550 million text messages per month, downloaded 5 million games and exclusive content items per month and sent 3 million picture messages per month during the fourth quarter.
T-Mobile USA, which released limited fourth-quarter and full-year 2003 results last week, also found customer growth success during the fourth quarter, posting 1 million net subscriber additions during the final three months of the year. The results were ahead of analyst’s estimates and in line with the 1 million subscribers the carrier added during the fourth quarter of 2002.
For the year, T-Mobile USA said it added 3.2 million new customers compared with 2.9 million net additions the previous year and ended 2003 with 13.1 million total subscribers.
Bolstering the carrier’s fourth-quarter growth was an influx of 124,000 prepaid subscribers this year, compared with a loss of 61,000 during the fourth quarter of 2002, though T-Mobile USA noted prepaid subscribers comprised only 11 percent of its total customer base at the end of 2003 compared with 16 percent at the beginning of the year. T-Mobile USA also reported a reduction in customer churn from 3.5 percent during the fourth quarter of 2002 to 3.2 percent last year.
T-Mobile USA’s strong customer growth is also expected to inch the carrier closer to Nextel. The nation’s fifth-largest carrier began the fourth quarter with approximately 12.9 million subscribers and is forecast to add between 500,000 and 600,000 subscribers during the fourth quarter.
