Verizon talks up transformation in solid Q4; "encouraged" by go90 - Mobile World Live

Verizon talks up transformation in solid Q4; “encouraged” by go90

21 JAN 2016

Verizon talked up its ambitions “to be an innovator in the digital first mobile world in 2016 and beyond,” as the company capped off “a year of transformational change” with a strong set of Q4 results.

CEO and chairman Lowell McAdam (pictured) said Verizon had “built and acquired next-generation network capability” in 2015 to help position the company going forward.

“Verizon embraced transformational change in 2015, and in 2016 the company has a huge opportunity to drive a new era of growth in our industry,” he added.

With regards to its “transformation” efforts, the company spent more than $4 billion on the acquisition of AOL, as well as acquiring Millennial Media which it said “significantly bolsters our strategy with cross-platform consumer and advertising offerings, particularly in mobile and video”.

go90
And in keeping with this strategy, the company also launched go90 in September, a mobile video entertainment app which is seen as an attempt by the operator to break out of its traditional business and offer internet video services.

Verizon’s Q4 results offered little update on the progress of the service so far, with only one reference to it in its earnings statement.

CFO Fran Shammo however did say in the company’s earnings call that while Verizon is “encouraged by the use of go90 so far”, he did not expect it to contribute to profit for approximately two years.

“Right now, we are more focused on increasing our viewership of go90, rather than it being a profit contributor,” he said.

“We see it as an important part of our wider video offering and we are hopeful this will allow us to generate incremental revenue, and develop new and exciting content. We expect to share more results of the platform and our wider video offering during 2016.”

Net income rises
In terms of mobile subscriber gains, the operator ended the period with 112.1 million retail connections, up 3.6 per cent year on year, from 108.2 million last year.

It however saw slower growth this quarter compared to last year, adding 1.5 million postpaid retail connections, compared to almost 1.99 million adds for the same period last year, representing a 23.5 per cent difference. Indeed, the operator has seen increased pressure from T-Mobile US and Sprint, which have been stepping up their promotional activities in the market.

Total company net income was, however, strong, hitting $5.39 billion, reversing a loss for the same period last year of $2.23 billion.

Total revenue for the quarter also rose to $34.25 billion, up 3.2 per cent year on year from $33.19 billion, which included results from AOL for the first time.

Shammo added the company was “pleased with AOL’s performance so far”.

For its wireless unit, the company reported revenues of $23.7 billion, up 1.2 per cent year on year from $23.4 billion, but it continues to see a drop in service revenue, which fell 5.6 per cent from $18.2 billion to $17.2 billion.

Equipment revenues meanwhile grew to $5.4 billion, from $4.2 billion, with Shammo putting the growth down to the shift in more customers buying new devices on instalment plans.

New revenue streams from IoT also saw continued growth, hitting $200 million for Q4, and $690 million for the full year.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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