Fresh from acquiring AOL for $4.4 billion last month, Verizon Wireless recently reported its earnings for the second quarter of 2015. The biggest wireless carrier in the United States posted revenues amounting to $32.2 billion, with earnings per share (EPS) at $1.04. Industry watchers had anticipated the carrier to post revenues of $32.45 billion, with earnings per share at $1.01 -- which means that Verizon Wireless just about met expectations while surpassing the projected EPS.
Together with the release of its earnings report, Verizon Wireless also stated that it is looking forward to another positive performance during the second half of the year. The carrier specifically cited that it is already finalizing its preparations for the release of its over the top (OTT) mobile video services, while at the same time, continuing to balance between providing quality mobile services to its subscribers and minimizing customer turnover rate as well as maximizing profits. Compared to the second quarter of last year, Verizon’s second quarter earnings this year was up 2.4 percent, with the EPS also up 14.3 percent.
During the previous quarter, Verizon Wireless managed to add 565,000 wireless net postpaid sign ups. In the second quarter, the carrier added 1.1 million postpaid connections. Out of that 1.1 million number, 842,000 net additions consist of tablets. The added 588,000 net smartphone additions outweighed the decrease of 266,000 in basic phones.
With regards to churn rate (customer turnover rate), Verizon Wireless managed to decrease its churn rate to 0.9 percent. During the previous quarter, the carrier had a churn rate of 1.03 percent.
With regards to wireline, Verizon Wireless claims that consumer revenues increased 4.5 percent year over year to $4 billion, with fiber optic services (FiOS) making up $3.4 billion. That number represents a 10 percent boost compared to last year’s, with 72,000 FiOS Internet and 26,000 FiOS Video net additions.
With its $4.4 billion acquisition of AOL, Verizon Wireless clearly wants to fortify and even expand its services that run over its physical networks, specifically any content and advertising that runs together with it. Increased usage and customer loyalty in these services grant the carrier plenty of potential for earning additional revenues which not only are recurring, but also serve as complements to what the carrier earns from charging parties for the use of its pipes.
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