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Verizon is the market leader, and that doesn’t look like changing soon

Verizon

T-Mobile US might do a lot of shouting about all the great things its doing, but Verizon hummed through the New Year in pretty good shape as 5G starts to emerge on the horizon.

In releasing its financial results, the three months to the end of December 2017, the lumbering giant of US telecoms revealed it is still hording a ridiculous subscription base, irrelevant to the whacky noises coming from elsewhere. Verizon finished the year with roughly 110 million postpaid subscriptions, a 2% climb from the previous year.

Earnings for the year were below analysts’ expectations, though part of the explanation might be down to the price war it has had to engage in with T-Mobile US. The race to the bottom is real in the US, though the larger the customer base, the more subscriptions there are to convert into 5G contracts when the time finally comes, later this year if you believe the Verizon PR quips. If being the biggest equates to being the best, Verizon is in a useful position.

“Verizon finished 2017 with great momentum, led by some of the best customer growth and loyalty results Verizon Wireless has delivered in recent years,” said CEO Lowell McAdam. “In 2018 we look to drive long-term shareholder value by deploying next-generation network services, leveraging global platforms such as Oath, and using our strategic Humanability approach to turn innovative ideas into realities.”

And the market seems to agree. Overnight trading on Verizon saw a slight boost for the carrier, though there was a drop once the market opened. This does seem to have stabilised, at the time of writing, roughly at yesterday’s closing price. If anything, it is another quarter negotiated in the choppy waters of the US telco space.

Revenues for the three months stood at $33.9 billion, a 5% year-on-year increase, with net income standing at $18.7 billion. Thanks to President Trump’s tax bill, Verizon added $15.849 billion to the spreadsheets, although how this money will be spent is unknown for the moment. What might be worth noting is that without this one-off tax reprieve, net income would have been lower than the same period twelve months ago.

On the wireless side of the business, total revenues stood at $23.771 billion, a 1.7% year-on-year increase, with the team adding 1.174 million postpaid subscriptions. Over the course of 2017, it added a total of 2.084 million postpaid subscriptions, so this certainly was a positive finish to the year in terms of acquiring new customers. Churn was down to 1%, compared to the 1.1% in the same quarter of 2016; most of the numbers are heading the right direction.

In the wireline business unit, things were a bit more mixed. Fios internet subscribers were up 3.5% year-on-year to 5.8 million subscriptions, though the Fios video subscriptions fell 1.6% to 4.6 million. These aren’t staggering numbers heading in either direction. There is little damage done to the business, but not exactly a huge amount to shout about year-on-year either.

Verizon hasn’t done anything exceptional or incredibly notably over the last three months, but it managed to source an extra 1.2 million subscriptions from somewhere. Keep doing what you’re doing might be the message to the wireless business from the top.

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