Verizon just announced its financial results for Q2 2012 and the wireless business had yet another strong quarter. The nation's biggest wireless carrier added 888,000 new postpaid subscribers and reached a total of 94.2 million retail customers, an increase of 4.9 percent over Q2 2011. The 888K new subscribers handily beat out analyst estimates that pegged new subscribers closer to 666,000. Total retail service revenue for the quarter was $15.2 billion, an increase of 8.6 percent year-over-year, with data revenues increasing a whopping 18.5 percent year-over-year to hit $6.9 billion.
The wireless business also had a record quarter in terms of ARPU (average revenue per user), with the average of $56.13 per customer representing a 3.7 percent increase over Q2 2011 — Verizon says this was its highest growth in three years. Unsurprisingly, continued smartphone growth drove the ARPU gains — Verizon says that a full 50 percent of its postpaid customers now use smartphones, up from 47 percent last quarter. Verizon's also doing a great job at hanging on to customers with a churn (or attrition) rate of 0.84 percent, the lowest in four years. We'll see how these rates hold up next quarter — between the launch of "Share Everything" plans late in the quarter and the Galaxy S III release, Q3 could be another big quarter for the wireless business.
Verizon's CTO strongly hinted that the next iPhone was coming in Q4
As for Verizon's wireline business, Q2 operating revenues of $9.9 billion represented a 3.1 percent decline over Q2 2011 — though consumer revenue actually grew 2.5 percent year-over-year and consumer ARPU reached $100.26, a record high for the company. From a customer standpoint, Verizon added 134,000 new FiOS internet connections and 120,000 new FiOS video connections — both down quite a bit compared to last quarter. The company now has a total of 5.1 million FiOS internet customers and 4.5 million FiOS video customers. Looking at the ARPU for FiOS specifically highlights just how important the service is to Verizon's wireline business — ARPU for those customers was over $149 for the quarter, significantly higher than the wireline business overall. Verizon will be holding a conference call this morning to give more details on its quarterly performance; we'll be updating this post with any noteworthy details.
Update: Verizon just finished its conference call, and had a few details to share about iPhone and Android sales, Galaxy S III performance, and the immediate impact of the "Share Anything" plans. Verizon sold 2.7 million iPhones, down from the 3.2 million it sold last quarter — it also sold 2.9 million Android devices, 2.5 million of which run on Verizon's LTE network. It's not terribly surprising to see the iPhone sales start to slow as we get closer to the next iPhone launch, and the Galaxy S III should help Android maintain that advantage next quarter.
Speaking of Samsung's latest, Verizon CFO Fran Shammo noted that the Galaxy S III "is selling extremely well," and also said that "the rumor-mill out there with a new phone coming out in the fourth quarter" should help Verizon see more subscribers upgrading their phones. It sounded like a pretty strong allusion to the next iPhone, though we can't take his word as gospel.
Shammo also mentioned Verizon's planned 700mhz spectrum sale, saying that "we are ready to go as soon as we get approval on the spectrum code deal." He went on to sale the sale will happen "as fast as we can get the auction done" — good news for AT&T if the carrier is still interested in purchasing the spectrum.