Verizon Wireless added fewer smart phone customers in the fourth quarter, before getting the Apple Inc. iPhone, as the carrier also announced plans to initially sell the iPhone with a $30 unlimited plan, its standard smart phone plan.
The news comes as Verizon Communications Inc. reported a 2.6 percent decline in fourth-quarter revenue, hurt by its declining wireline business. The telecommunications company’s per-share earnings missed Wall Street’s expectations by 1 cent.
Verizon Chief Financial Officer Fran Shammo said he expects earnings growth of 5 percent, to 8 percent in 2011, based on Wall Street’s estimate of 11 million iPhones sold this year; however, he expects twice the earnings growth in 2012, as Verizon Wireless benefits from fewer subsidy costs and more high-value subscribers in the second year of their contract.
Shammo added he also expects revenue growth of 4 percent to 8 percent this year.
Verizon Wireless added 872,000 contract customers in the fourth quarter, a marked decline from the 1.1 million customers added a year earlier.
“It wasn’t what I hoped it would be,” Verizon President and Chief Operating Officer Lowell McAdam said before the company’s investor day event Tuesday. McAdam admitted that the iPhone had a dampening effect on results.
Verizon Communications shares are up 69 cents, or 2 percent, to $35.90 in late morning trading.
Verizon Wireless also said Tuesday it plans to sell the iPhone with a $30 unlimited plan. McAdam said many AT&T customers have unlimited plans grandfathered in before the carrier made the switch to limited tiered pricing, and he wanted to make switching as easy as possible.
“I’m not going to shoot myself in the foot,” he said.
The unlimited offer, however, will end once the carrier moved to tiered pricing, which McAdam said would be in the “not-too-distant future.”
