Verizon touted “continued strong profitability and customer loyalty” for its Wireless unit, although its Q3 numbers also pointed to the changing nature of the US market.
“While we transform our company in a challenging environment, we have maintained the financial flexibility to invest in our industry-leading networks to better serve customers, add scale to bring innovation to the mobile media and IoT markets, and increase dividends for a 10th consecutive year,” Lowell McAdam, chairman and CEO, said.
The company pointed to deals such as its acquisition of connected vehicles company Telogis and fallen internet giant Yahoo – although the latter deal is not proving to be plain sailing. It said growth continued in new markets, with strong demand from advertisers for “AOL’s expanding programmatic capabilities and high-quality data analytical tools”.
The company reported a net profit for the quarter of $3.75 billion, down 10.2 per cent from $4.17 billion, on revenue of $30.9 billion, down 6.7 per cent from $33.16 billion. It said the revenue decline would have been a more modest 2.9 per cent when excluding subsequently divested landline operations from the 2015 number.
For the Wireless unit, segment EBITDA of $9.9 billion was essentially flat year-on-year, on revenue which decreased 3.9 per cent to $22.1 billion. The decline was attributed to customers choosing unsubsidised device payment plans: it said device payment plan billings plus service revenue increased 2.3 per cent to $19.3 billion year-on-year.
It ended the period with 113.7 million retail customers, up 2.6 per cent year-on-year, driven by gains in the contract segment.
But the pace of additions has slowed: the 525,000 added in Q3 compared with 1.2 million in the same period last year, and the 442,000 postpaid additions was below analyst forecasts.
And the company lost 36,000 lucrative phone customers, as 4G gains were offset by declines in basic and 3G phones.
Organically, IoT revenue, led by telematics, increased 24 per cent year-on-year to $217 million.