Surpassing even the most optimistic forecasts, Verizon Wireless said it added 1.64 million subscribers during the first quarter of this year, ending the quarter with 45.5 million total subscribers. The results topped larger rival Cingular Wireless L.L.C.’s 1.4 million net additions as well as the 1.39 million subscribers Verizon Wireless added during the first quarter of 2004.
Analysts were expecting Verizon Wireless to post around 1.4 million net customer additions for the quarter.
The strong customer growth was attributed to a 6-percent increase in gross subscriber additions from 3.2 million last year to 3.4 million during the first quarter of this year and a sharp reduction in customer churn from 1.6 percent to 1.3 percent. Verizon Wireless added that its customer growth included 1.58 million direct subscribers, which was a 31-percent improvement compared with the first quarter of 2004.
Verizon Wireless also posted a 2-percent jump in average revenue per user from $48.04 during the first quarter of 2004 to $49.03 this year. The carrier noted that its data services contributed $416 million in total revenues during the first quarter, or more than $3 in ARPU, and that total data customers increased 53 percent year-over-year to 17.8 million subscribers at the end of the quarter.
Verizon Wireless reported that its customers sent 3.6 billion text messages, 41.4 million picture messages and downloaded 34.1 million applications from its Get It Now service during the quarter.
Analysts were bullish on Verizon Wireless’ increased data contributions, but noted that the carrier still trailed the $4 in data ARPU generated by Cingular and more than $6 in data ARPU reported by Sprint Corp.
Total wireless revenues surged more than 20 percent during the quarter from $6.2 billion in 2004 to $7.4 billion this year. Wireless revenues as a total percentage of parent company Verizon Communications Inc.’s total revenues also increased from 36.1 percent for the first quarter of 2004 to 40.8 percent this year. Wireless income jumped more than 36 percent year-over-year from $318 million to $433 million, while operating income margins improved from 19.5 percent to 20.8 percent.
