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Verizon Report 4G And Upgrades Going Strong Although Promotions Will Hit Profits In The Short Term

December 8, 2014 - Written By John Anon

Verizon today gave an update on how its year is going so far. Verizon will be releasing a full earnings report closer to the end of January which will provide a much fuller and frank explanation. That said, today was the first indication of what to expect. The press release noted that during the fourth quarter Verizon were reporting strong growth in the wireless sector. In particular, it seems the 4G market seems to be the real winner for the company. Which makes sense when you factor how much they have been telling us recently about the integration and future roll-out plans for their 4G LTE network.

Verizon noted that the strong demand for 4G smartphones and tablets were most notable on their Everything Shared data plans. Adding that its postpaid gross additions are both higher sequentially and year on year. Further adding to this, Verizon also acknowledged that new devices launches were a huge driving force behind customer upgrades. The announcement stated, that three out of four upgrades were “from a basic phone or a 3G smartphone or a high-value customer”. Not to mention, Verizon also reported that almost 25% (24%) of their upgrades in the fourth quarter utilised their Verizon Edge Equipment Installation plan. This in short, allows users to pay off for devices over the length of a contract on a monthly basis. This 24% figure was noted as being twice as high (12%) as what was recorded for the third quarter.

That said, it was not all good news. Verizon did admit that short-term pressure on its profit margins and earnings per share were inevitable. This was attributed to a combination of the promotional offers of the fourth quarter coupled with the strong customer volumes seen this quarter. Whether this is a sign of the impact Sprint and T-Mobile are having on Verizon is less clear. Although this will be more easily identified when all the companies release their wider year figures and trends towards the end of the year. Are you a Verizon customer? Any surprises in the press release? If you would like to know more then click here to head over to Verizon and read the press release in full.