Feature Article

October 17, 2013

Verizon Communications Grows Mobile Revenue 7 Percent

Verizon Communications grew operating income and earnings at double-digit rates, for the third consecutive quarter, in the third quarter of 2013.

Global enterprise and mass market fixed network revenues were flat, year over year. In other words, Verizon’s growth now is driven by mobile services. Fixed network revenues are flat, and mobile contributes about 66 percent of total revenues.

But mobile revenue was up 7.1 percent, year over year. That pattern of revenue growth, led by mobile, by now is well established, while the trend of flat overall fixed network revenues likewise is consistent.

Few, if any, observers think that mix of revenues and revenue drivers will change in the future, with the single exception of possible slowing of mobile revenue growth in the future as mobile Internet revenue growth slows.

At least for the moment, though, Verizon Communications is doing about as well as any communications service provider could be doing, at the present moment.

Image via Shutterstock 

Total operating revenues in the third quarter of 2013 were $30.3 billion, a 4.4 percent increase year over year. Verizon notes that is the fourth consecutive quarter of year-over-year revenue growth of more than four percent.

Operating income increased 30.0 percent, to $7.1 billion in third-quarter 2013, compared with $5.5 billion in third-quarter 2012. Operating income margin was 23.5 percent in third-quarter 2013, compared with 18.9 percent in third-quarter 2012.

Total mobile segment revenues were $20.4 billion in third-quarter 2013, up 7.2 percent year over year. Service revenues in the quarter totaled $17.5 billion, up 8.4 percent year over year. Retail service revenues grew 8.0 percent year over year, to $16.8 billion.

Retail postpaid average revenue per account increased 7.1 percent over third-quarter 2012, to $155.74 per month.

Mobile operating income margin was 33.8 percent, compared with 31.8 percent in third-quarter 2012.

Verizon Wireless added 1.1 million net retail connections, including 927,000 retail postpaid net connections in the third quarter to grow total retail connections to 101.2 million connections, up 5.5 percent year over year.

Some 95.2 million of those retail connections were postpaid connections.

At the end of the third quarter, smartphones accounted for more than 67 percent of the Verizon Wireless retail postpaid customer phone base, up from 64 percent at the end of second-quarter 2013, while postpaid churn was 0.97 percent in the third quarter.

Edited by Alisen Downey

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