Verizon Wireless Plows Ahead

The big cell-phone service provider keeps adding users -- and holding onto them.
Author:
Publish date:

Verizon

(VZ) - Get Report

Thursday posted a solidquarter as its wireless operation continues to pick upsteam.

For its third quarter ended Sept. 30, the New Yorktelco earned $1.8 billion, or 64 cents a share. That's flatwith a year ago and in line with the Wall Streetanalyst consensus estimate. Revenue rose 6.7% to $18.2billion as the company's fast-growing

VerizonWireless

operation continues to add customers at arapid pace.

Verizon posted a slight revenue gain at itsdomestic wireline telecom unit, posting unit revenueof $9.6 billion. The company said the gain marks itssecond uptick in a row. Revenue in the consumer,business and wholesale lines of business all increasedin the third quarter of 2004 compared with the secondquarter of 2004.

Verizon added a net of 309,000 broadband DSL linesin the third quarter of 2004 for a total of 3.3 millionDSL lines in service, representing 1.1 million netadditions over the past year.

Verizon said the wireless unit accounted for morethan 40% of revenue in the latest quarter, marking thefirst time it reached that mark. Wireless servicerevenue rose 21% from a year ago, and the companyadded 1.58 million net retail customers. The gaingives Verizon 42.1 million customers.

Verizon Wireless, a joint venture with Britishtelco

Vodafone

(VOD) - Get Report

, is nowthe nation's No. 2 cell phone service after

Cingular

completed its $41 billion deal to takecontrol of AT&T Wireless. Cingular's customer total isnow about 47 million.

But observers have predicted that that gap wouldnarrow as already high customer defection ratesincrease during the combination process. Executives at

SBC

(SBC)

and

BellSouth

(BLS)

, the joint venture parents of Cingular,have said that they expect so-called churn problems toresume for a few months before stabilizing asintegration problems are worked out.

On Thursday, Verizon indicated that it continuesto add customers and keep them, saying its monthlychurn rate was steady at 1.5% in the latest quarter.

One potential benefit for Verizon from theCingular takeover deal is that AT&T Wirelessshareholders will have a

pile of cash to investand Verizon's strong wireless business may attractsome of the money.

On the wireline side, Verizon is planning to placea big bet on fiber and the prospects of selling thetriple play of TV, phone and fast Internet services.Last week, Verizon

added several communitiesin six states to its blueprints for extending fiber tohomes.

Early Thursday, Verizon rose 20 cents to $39.60.