Verizon (NYSE: VZ) has released its Q307 earnings, showing an increase in revenue of 5.8 percent year-on-year to $23.8 billion, while operating income grew 19 percent to $4.2 billion. On the mobile part of its business revenues came to $11.3 billion, an increase of 14.4 percent year-on-year, while service revenues increased 15.1 percent year-on-year to $9.7 billion—driven by customer growth and increased demand for data. Verizon Wireless’s ARPU increased by 1.9 percent to $52.17, but data ARPU grew 42.9 percent to $10.59. Total data revenues increased 63.4 percent year-on-year, pulling in $2 billion—a fifth of wireless service revenues in the quarter. The number of retail data customers increased by 35.6 percent to 42 million. Verizon added a net 1.6 million customers, mostly post-paid. Verizon said that at the end of the quarter more than half of its retail customers—32 million—had broadband-capable devices, and it continued to expand its EV-DO Rev A network.

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Data usage: During the third quarter Verizon Wireless customers sent or received 36.5 billion SMS and 721 million MMS. Verizon customers also completed 29.7 million music and video downloads.

From the conference call: Verizon is banking on its Voyager handset to challenge the iPhone, and is “not overly concerned about impact of the iPhone”. It’s putting the increase in data usage down to the high number of capable devices, and: “We’re also seeing new applications coming to the market, and we’ll customers increasingly use those applications.” It was pointed out that 68 percent of retail customers are now data users, but considering that includes messages it’s not a very high figure—so there’s plenty of room for growth. Verizon also said that it “may hit the 30 percent range” in terms of data contribution to revenues, and when pressed by a questioner said that 35 percent was “possible”.
Release

An analysts view on VZW’s earnings: