Verizon hit by merger costs

Merger and integration costs with MCI hit US carrier Verizon Communications during the second quarter, with earnings dropping to $1.6bn (£800m), down from $2.1bn a year ago.

Consolidated operating revenues for the quarter hit $22.7bn, a 25.6 per cent increase compared with the second quarter 2005.

The wireline business added 440,000 net broadband connections, including both DSL and FiOS fibre optic subs. FiOS customers accounted for 111,000 of the net broadband connection additions in the second quarter and now make up 375,000 of the company’s 6.1 million total wireline broadband connections, as Verizon’s FTTP (fiber to the premises) network passed a total of 4.5 million users by mid-July 2006 and is on target to pass 6 million by year-end.

On a pro-forma basis, wireline operating revenues decreased 6.2 per cent year on year, driven in part by expected declines in the former MCI mass market business.

Mobile unit Verizon Wireless added 1.8 million net customers in the second quarter, delivering a total of 54.8 million customers nationwide.

Wireless revenues grew 18 per cent year on year to $9.3bn in the second quarter, driven by customer growth and demand for data services. Topping $1bn for the first time in a quarter, wireless data revenues accounted for nearly 12.9 per cent of total wireless service revenues.