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Subs up, but ARPU slips

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As expected, Verizon edged even closer to cellular leader Cingular in the quarter ending December 31. Verizon added 2 million net mobile subscribers, 200,000 more than Cingular, bringing the total to 51.3 million. That's an addition of 7.5 million over the year, 17.5 per cent up.

For the final quarter of FY 2005, Verizon booked $19.3bn revenue, up 6.7 per cent year-on-year, and $1.7bn in earnings. The company is a formidable money-making machine: the operating profit for the year was $22bn on revenue of $75bn. If you combined the revenues of Intel, Apple and Google, Verizon will still be almost twice as large.

The emphasis on subscribers took the attention away from an average revenue per subscriber (ARPU) statistic which is heading in the wrong direction. Verizon ARPU fell by 1.9 per cent year-on-year, to $49.36. That's comparable to Cingular but far below rival Sprint.

But Verizon, which launched an over-the-air digital music download service V CAST in the quarter, pointed to growing data revenue from younger users. And all the Stateside carriers are aware that they've barely begun to tap the potential market, compared to the European carriers, where ARPUs are almost ten times that of Verizon and Cingular.

The much-watched FiOS, or fiber-to-the-premises data service now reaches three million homes, nine months after launch, with a take up rate of 14 per cent, claimed Verizon.

Verizon says it's setting aside $550m in the current quarter for integration expenses related to the MCI merger.

Fourth placed carrier T-Mobile, which reports on March 2, yesterday said it had added 1.4 million net new customers in the final quarter of 2005, bringing the total to 21.7 million, up 25 per cent. The Deutsche Telekom subsidiary said it had reduced churn on pay monthly accounts to 2.3 per cent. ®

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