Verizon Wireless said it added an industry-record 1.9 million subscribers during the second quarter, which was a 25-percent improvement compared with the 1.5 million customers the carrier added during the second quarter of last year. The growth was significantly higher than the 1.1 million customers added by larger rival Cingular Wireless L.L.C. during the quarter and pushed Verizon Wireless’ total customer base to 47.4 million subscribers at mid-year.
Verizon Wireless noted that retail customers constituted 99.5 percent of the growth during the quarter and 96 percent of the carrier’s total customer base.
Verizon Wireless’ strong customer growth was boosted by increased customer loyalty as the carrier’s customer churn results dropped from 1.4 percent during the second quarter of 2004 to 1.2 percent this year. Verizon Wireless added that postpaid customer churn was at 1 percent during the quarter.
Average revenue per user dropped 2.7 percent year-over-year to $49.42 during the second quarter, but increased nearly 1 percent sequentially from the first quarter of this year. Analysts have cited the increasingly popularity of family plans that allow new customers to sign up for service at lower monthly recurring charges as a reason for flat ARPU results.
Despite the drooping ARPU, Verizon Wireless posted a 14.6-percent increase in total revenues from $6.8 billion during the second quarter of 2004 to $7.8 billion this year. Wireless revenues accounted for 42.3 percent of parent company Verizon Communications Inc.’s total revenues during the quarter compared with 38.6 percent of total revenues during the second quarter of 2004.
Wireless operating income also improved more than 10 percent from $1.6 billion in 2004 to $1.8 billion this year, though operating income margins dropped from 23.6 percent last year to 22.7 percent this year.
“Wireless in particular remains in high gear,” said Ivan Seidenberg, Verizon chairman and chief executive officer. “Because of the healthy margins in our wireless business, we are able to take the steps to increase our market share, which we did effectively this quarter.”
Verizon Wireless added that data services accounted for $483 million in revenues during the quarter-or 7 percent of total service revenues-and that data customers increased 50 percent year-over-year to more than 19 million subscribers. Verizon Wireless also reported that customers sent 4.6 billion text messages and 62 million picture and video messages and downloaded 36 million games, exclusive content, ringtones and ringback tones through its Get It Now service during the second quarter.
