Friday, July 22, 2011

Verizon Second Quarter Results: 63% of Revenue is From Wireless

Over the last year, Verizon wireline voice revenue has dropped from 17 percent of total revenue to 14 percent. Wireless revenue grew to 63 percent of total revenue, up from 61 percent a year ago. FiOS services, which includes some voice contribution, contributes 14 percent of total revenue, up from 13 percent a year ago. Read more here.

As was the case for AT&T, fixed line broadband service revenue was up substantially, growing 21 percent, year over year. FiOS-based revenues now represent 57 percent of total fixed-line consumer revenues.

But one might wonder, given the huge investment Verizon has made in FiOS, compared to its huge profile in wireless, how valuable that investment has been. Nobody would question the need to have made the broadband upgrade, though some might still wonder whether another,less expensive design would have been sufficient. The contrary view is that Verizon might have done less well had it chosen not to upgrade to a full fiber-to-home network.

And some will argue the upside lies in the future, as bandwidth demands continue to increase. But cannot escape notice that AT&T gets half its revenue from wireless, while Verizon gets 63 percent from wireless. As policymakers continue to urge service providers to invest more, the question of financial return looms especially large.

Fixed-line network revenue continues to drop as a percentage of total, for both AT&T and Verizon. That is not the environment most conducive to the notion of aggressive investment.

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