updated 09:45 am EDT, Thu April 22, 2010
Verizon's Q1 2010 weaker than ATT
Verizon today provided a mild shock to the cellular industry by reporting relatively disappointing results for the early part of 2010. Although still taking advantage of phones like the Motorola Droid, its subscriber growth slowed down to 1.5 million new cellphone users in the winter and was noticeably slower than AT&T's 1.9 million additions over the same timeframe. Its net profit also plunged from $1.6 billion a year ago to $400 million today.
Its total cellphone customer base is now up to 92.8 million.
The company still saw the direct benefit of smartphones as it kept its customer turnover down to a low 1.07 percent and its data revenues up 26.4 percent as more customers had to take on data plans.
Verizon characterized the results as "solid," and some of the profit drop was attributed to taxation of a retirement health care benefit that had previously been deducted. Nonetheless, the results potentially point to AT&T successfully using the iPhone as a way of attracting customers; about a third of iPhone buyers this winter were new to AT&T, and a significant portion of these are likely to have come from Verizon.
The carrier may tighten up competition significantly in the spring as the imminent launch of the HTC Droid Incredible will give it a new Android flagship that, at least temporarily, should out-specify the Apple handset.