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Verizon's FiOS Grows, Wireless Slows in Q4

Verizon Communications Inc. (NYSE: VZ) reported a record number of new FiOS subscribers during its fourth-quarter 2008 results, but the carrier added 800,000 fewer new wireless subscribers than it had a year earlier. (See Verizon Closes Q4.)

The operator added 303,000 FiOS TV customers and 282,000 FiOS Internet customers in the quarter, which is the highest ever quarterly subscriber addition for the broadband service. At the end of 2008, Verizon had 1.9 million FiOS TV customers.

But at Verizon Wireless , there were 1.2 million net new customers added in the fourth quarter, which is down compared to the 2 million net subscriber additions in the fourth quarter last year. For the full year 2008, however, Verizon added 5.8 million wireless customers to bring the total subscriber base to 72.1 million. The operator anticipates this subscriber growth to be the highest among the U.S. mobile operators for 2008.

Verizon reported net income of $1.2 billion on revenues of $24.6 billion for the fourth quarter, compared to a net income of $1 billion on revenues of $23.8 billion reported in the same period last year.

"There is no evidence of slowing or customers trading down on plans or features," said Denny Strigl, Verizon president and COO, when addressing the specter of a slowdown in business at Verizon Wireless.

Mobile data booms
Wireless service revenue in the fourth quarter was up 12.3 percent year-on-year to $12.8 billion. And the operator recorded its 11th consecutive quarter of average revenue per user (ARPU) growth with total wireless service ARPU of $51.72 up 1.4 percent year-on-year, which was driven by data services.

Full-year mobile data revenues were $10.7 billion, which was up 44 percent compared to 2007. Mobile data services account for 26.8 percent of Verizon Wireless total service revenues. Mobile data revenues were up 41.4 percent and non-messaging data revenues were up 52 percent.

LTE in 2010
Strigl updated Verizon's timeline for rolling out 4G mobile broadband technology Long-Term Evolution (LTE). Verizon plans to start market trials later this year, he said, and have commercial availability in the first half of 2010.

Verizon also updated the progress of its fiber access buildout. At the end of 2008, FiOS fiber-to-the-premises passed 12.7 million premises. Meanwhile, fiber-to-the-home now passes about 40 percent of households in Verizon's landline footprint.

— Michelle Donegan, European Editor, Unstrung

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