Verizon sees Q2 wireless growth, reveals emerging IoT business

Verizon has released its report for Q2, unveiling revenue growth in its Wireless business, an emergence of an IoT revenue stream and is targeting future growth following its acquisition of AOL.

The US telco giant claims in the second quarter of 2015 its total revenues for Verizon Wireless sat at $22.6bn, a growth of 5.3% year-on-year. Service revenue totalled $17.7bn, a slight decline on the same period 12 months ago, down by 2.2% – while it says instalment payment options are responsible for the growth of equipment revenues from £2.4bn last year to $3.9bn in Q2 2015.

In terms of subscriber additions, Verizon claims it had an additional 1.1 million retail postpaid subscribers (net), nearly double the net additions seen in Q1. Of those additions, 842,000 are on 4G smartphones, which now constitute roughly 73% of the retail postpaid connections – and Verizon’s LTE network now handles 87% of wireless traffic, double that of last year.

Meanwhile, Verizon also says IoT is responsible for the growth of new revenue streams which, including telematics, is responsible for approximately $165m in Q2 2015 and $320m year to date. While this figure pales in comparison to its overall revenue streams, the fact it’s in line to exceed half a billion dollars-worth of revenue in 2015 is indicative of its future potential, particularly considering each technology is neither mature nor pervasive throughout the industry, despite its hype.

In its wireline business, finally, Verizon cited a 10% year-on-year growth in its FiOS revenues, with 72,000 FiOS internet and 26,000 FiOS video net additions.

“Verizon has delivered another quarter of strong financial and operational results, based on consistent network reliability and superior value that continues to attract new customers,” said Chairman and CEO Lowell McAdam. “In the second quarter, we again balanced quality Verizon Wireless connections growth with low churn and profitability, and we announced and completed our acquisition of AOL. We’re now poised to offer customers exciting new over-the-top (OTT) mobile video services, and we look forward to a very positive second half of 2015.”

Verizon says this quarter’s results don’t reflect any results from the AOL transaction, which cost the telco $4.4bn in May. AOL’s financial results will be included in the telco’s third quarter 2015 results, as it begins more aggressive pursuing of its video strategy, something echoed by CFO Fran Shammo.

“We are committed to building the business for future growth,” he said. “In the first half of this year, we invested approximately $18bn in spectrum licenses and capital for future network capacity. We also invested more than $4bn to acquire new capabilities with the AOL transaction, which supports our longer-term video strategy.”