Verizon reported $24.8 billion in sales, beating expectations. Net income was $1.67 billion, vs. $1.27 billion in third-quarter 2007.
Tighter consumer purse strings notwithstanding, the company expects double-digit revenue growth from its wireless business in the near term. Last quarter, 70% of Verizon's total service revenue growth came from wireless data services as consumers shelled out extra dollars to stay tethered to the web, e-mail and other internet services.
iPhone poses a threat
Verizon, which leads the industry in customer retention, saw its churn rate rise to 1.33% last quarter compared to 1.27% a year ago, though it added 1.5 million subscribers. The slight uptick in customer loss has been blamed on the coveted Apple iPhone, for which telecom giant AT&T is the exclusive carrier.
As smart phones accounted for about 30% of the retail devices sold in the quarter, all eyes will move to the much-anticipated BlackBerry Storm, the first touch-screen smart phone by Research In Motion. The handset, a challenger to the iPhone, will only be sold by Verizon and should land in stores come November.
Whether adding the BlackBerry Storm to its lineup can help stem customer defections to AT&T is a question mark as the unstoppable iPhone remains a headache for all the carriers, including Verizon.
Still, confidence was on display that the company's wireless business will hold up through the economic downturn, and there are no plans to tinker with the pricing. "We're really not seeing any significant slowdown or impact in wireless at this point," Verizon President-Chief Operating Officer Dennis Strigl said today during a conference call with analysts and investors. "We're right on the target that we had set for ourselves, so we don't see any shifting to lower price packages."
Still on the table is Verizon's deal to buy Alltel, which if approved, would make the company the largest wireless carrier.