Verizon approached an inflection point for its wireless business in Q1, as CFO Matt Ellis revealed service revenue lifted in March after a long downward slide.
Though service revenue in Q1 2018 as a whole dipped 2.4 per cent year-on-year to $15.4 billion, Ellis said the operator expects upward momentum in the segment to continue. He added service revenue growth is “on track” to turn positive near the end of 2018.
Even without a bump from service revenue, overall wireless revenue climbed around $1 billion year-on-year to $21.9 billion in Q1, driven by an increase in equipment revenue from $3.8 billion in Q1 2017 to $5 billion.
The financial stabilisation of Verizon’s wireless business came despite mixed subscriber figures.
Seasonal subscriber weakness continued in Q1, as Verizon shed 24,000 post paid subscribers. The drop was a far cry from the 289,000 subscribers lost in the same period of 2017 and strong net additions of other connected devices, such as wearables, further buoyed the post paid segment in the recent period.
However, prepaid losses of 335,000 in Q1 2018 were up sharply from 17,000 in the 2017 period.
Capex of $2.4 billion was up from $1.8 billion in Q1 2017, but remained fairly consistent with Verizon’s historical outlay despite the operator’s move to launch 5G services in the second-half of the year.
Overall, the operator generated net income of $4.7 billion in Q1 2018, up from $3.6 billion in the 2017 period.
CFO Matt Ellis noted the operator is already hard at work deploying next generation nodes in initial markets for the launch, and reiterated Verizon’s densification efforts over the last several years laid the groundwork for its 5G deployment, meaning a spike in capex isn’t necessary to fund the launch.
Ellis added a single set of infrastructure will be used to deploy both residential and mobile 5G, and noted the residential broadband launch is the “first slice of a multi-use asset”.