The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
recently announced its third-quarter earnings, which received a boost from better-than-expected postpaid wireless subscriber additions.
added more new wireless customers in total (2.1 million vs. Verizon's 1.3 million), Verizon landed almost triple the number of more lucrative postpaid customers.
However, the total number of iPhone sales proved to be a dampener of sorts as the carrier could activate only 2 million units compared to the 2.7 million units AT&T managed to activate last quarter. The carrier's wireline segment grew sequentially on the back of solid gains in its consumer and business segments.
We have revised our
, about 20% above its market price.
See our complete analysis for Verizon
Sluggish Wireless Growth
According to a recent report, the number of wireless subscriber connections (327.6 million) has surpassed the population (315.5 million) in the United States. As the wireless industry nears a saturation point, Verizon and other carriers are competing for new subscribers, especially those who pay for lucrative data plans on smartphones.
Postpaid customers typically have higher ARPU levels compared to prepaid customers, which is why postpaid net adds is a more significant driver than prepaid. Verizon has done well on this front as the carrier managed to add nearly three times as many postpaid wireless subscribers as AT&T this quarter.
Also, a less-than-attractive number of iPhone activations led to lower wireless subscriber additions as people put off buying an iPhone in anticipation of the newer version that was released recently. The iPhone 4S, which sold 4 million units in its very first weekend, will likely to bring in more customers for Verizon next quarter.
Verizon is in ongoing negotiations with about 45,000 wireline union workers who walked off the job for two weeks to protest deep concessions the company is seeking in a new multi-year contract. The strike and impact from Hurricane Irene and Tropical Storm Lee cost Verizon about $250 million. However, that did not stop Verizon from reporting strong gains in the customer and business segments of the wireline business.
The company has been performing well on the FiOS front for quite some time now and may post even better numbers if it manages to reach an agreement with the workers soon.
Also, with the fast and on schedule deployment of the 4G LTE network which now covers 165 markets, the company has a competitive advantage over its rivals in the wireless department as well.
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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.