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Verizon Fixates on 'Future' Network, as It Loses Subs, Revenue

Dan Jones
4/20/2017
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Verizon's CFO said Thursday that the operator is continuing to spend -- on fiber and more -- to build "the network of the future," even as its first quarter results show how intense the competition is in the US mobile market.

Notably, Verizon reported a net loss of 307,000 retail postpaid connections -- those that pay for service on a monthly contract -- including 289,000 phone losses. Postpaid users are generally considered higher value customers than users that pay-as-they-go for service.

For the quarter ended March 31, Verizon's total operating revenue dropped $29.81 billion from $32.17 billion year-on-year, according to Thomson Reuters . Analysts had expected $30.77 billion for the quarter. Verizon's net income dropped to $3.45 billion -- or $0.84 per share -- from $4.31 billion, or $1.06 per share. Non-GAAP earnings per share were $0.95, whereas analysts had expected $0.99.

Verizon Communications Inc. (NYSE: VZ) CFO Matt Ellis said on the earnings call that total capital expenditure (capex) for the quarter of $3.1 billion was "certainly a lower quarter than we sometimes see." Nonethess, the CFO said that he is "confident" that 2017 capex will stay with the range of $16.8 billion to $17.5 billion that the operator has predicted. (See Verizon Looks Ahead to 5G as 4G Competition Affects Q4.)

Ellis does expect that the mix of spending will change, with more being spent on fiber deployment to support forthcoming 5G services and densification of its existing mobile network. The pendulum swinging to fiber is evidenced by Verizon's $1.05 billion, three-year deal with Corning announced this week. (See Verizon's Fiber Spend Won't End With Corning.)

When asked, Ellis wouldn't split out how many additional small cells the Corning fiber deal will allow it to support, although we now know that the operator will deploy the tiny basestations using both licensed and unlicensed 4G spectrum on its network. (See Unlicensed: It's What's Next for US Mobile Operators.)

Ellis didn't say anything that hadn't already been revealed publicly about its 5G customer pilots, due to launch this quarter. Verizon will launch fixed wireless tests in 11 markets in the US during the spring. Initial commercial services are being eyed for 2018. (See Verizon to Start Fixed 5G Customer Trials in April.)

— Dan Jones, Mobile Editor, Light Reading

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kq4ym
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kq4ym,
User Rank: Light Sabre
5/5/2017 | 11:16:26 AM
Re: Nota bene
Those earnings and revenue certainly don't look too great that's for sure. But, whether the CEO could be directly responsible would be a good questions. It wouldn't seem that alone would account for the numbers in the report.
mendyk
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mendyk,
User Rank: Light Sabre
4/21/2017 | 4:46:00 PM
Nota bene
Questions about Verizon's overall strategy -- or lack thereof -- are cropping up in light of the surprising quarterly report. Many of the questions are aimed at the CEO.
brooks7
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brooks7,
User Rank: Light Sabre
4/20/2017 | 8:35:06 PM
Cross Post...
@Steve Saunders...per the Reboot thread...here is Verizon's Profit...this quarter

"Verizon's net income dropped to $3.45 billion"

3.45 Billion in profit and they are whining about money.   Sheesh.  I wonder if we add up the equipment guys or the carriers who makes more quarterly (hint its the SPs).

seven

 
mendyk
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mendyk,
User Rank: Light Sabre
4/20/2017 | 1:35:38 PM
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Good thing Yahoo is on the way to fill that revenue sinkhole.
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