Verizon Posts Q4 Profit, Beats Expectations

Verizon Communication Inc. reported higher than expected fourth quarter earnings on Thursday. It was bolstered by the addition of 1.5 million wireless retail postpaid users and other tax benefits. The telecom company has swung to a profit of $5.51 billion or $1.32 per diluted common share, from a loss of $2.14 billion or 54 cents per share, the same quarter last year.

Shares of the major telecom provider rose to $46, up $1.59 or 3.57 percent. The company, known for its high quality network, reported an adjusted non-GAAP earnings per share of 89 cents, exceeding the Wall Street expectation of 88 cents. In the non-GAAP computation, Verizon excluded favorable accounting adjustments made to its pension obligations and gain from a sale of a spectrum license amounting to 44 cents per share in total. 

“We are entering 2016 with a lot of confidence. Verizon’s strong growth in earnings, and growth in high-quality connections and profitability in wireless resulted in free cash flow,” said Fran Shammo, chief financial officer. The total investment in the wireless company is $3.3 billion in the fourth quarter and $11.7 billion up 11.5 percent for a full year. Verizon declared its plan to pilot into 5G technology in 2016. 

“The carrier is taking a thoughtful approach towards architecting its business towards what it believes will be a ‘dual play world’ – wireless and broadband,” said Amir Rozwadowski, an analyst at Barclays PLC, in a report. “The key on the former is to ensure long-term network capacity through its support for LTE migration, new technology adoption and leading the charge on 5G while simultaneously creating platforms that expand its TAM,” or total addressable market. Verizon has recently announced new pricing models and plans that has changed old plans which permitted unlimited data usage. Now, the average revenue is expected to rise as users move up to higher priced tiers the company stated. 

“Wireless data opportunities are expanding. About 70% of Verizon Wireless postpaid subscribers are using smartphones. Therefore, the company still has an incremental penetration opportunity for wireless data services,” wrote David Heger an analyst at Edward Jones, in his report.

For the complete year, the company’s net income was $18.37 billion or $4.32 per share, 53.7 percent increase from the year-earlier income of $11.95 billion, or $2.42 per share. Revenues drastically rose to $131.62 billion from $127.09 billion.

AT&T Brings Back the Unlimited Data Plan with a Twist

AT&T has announced it will sell its unlimited data plan once again. The new offering has recently allowed subscribers to sign up for the plan to get data, voice and text messaging. But the unlimited data plan does come with a catch. Customers will be eligible for the unlimited plan only if they agree to subscribe to one of AT&T’s paid television services i.e. either Direct TV or AT&T U-verse. 

The decision made by the telecom company is to bundle services trying to grab maximum users and make them stream more TV on their smartphones. In addition, this recent change will directly affect Washington cellphone plans. Not only AT&T but also other major telecom carriers constantly make an effort to please customers with new plans. Plus, they style their mobile networks in an attractive way to sell to users. With the exploding popularity of online video, especially on a handheld devices, AT&T is sure that this will lure more Americans into using the network. Moreover, most telecom carriers are planning to offer free cellular phone services to appeal to more customers.

AT&T execs told CNN that the new plan is aimed at only those customers who either own cell phone service or TV service but not both of them. Altogether, it comprises of 36 million households.

Expanding into TV is also key for wireless companies as the cellular companies have drastically turned into competitive ones with telecom carriers engaging in expensive wars just to grab customers from the rival services.

AT&T Brings Back Unlimited Data

AT&T is reviving its data plans to DirecTV users. The offer also extends all its U-verse service customers. The deal is a reversal after a span of 5 years after shifting users away from similar plans on those who charge on mobile data use. 

Unlimited mobile data deals are not common these days but it is now at the center of a new offering by American Telecommunication Corporation that is trying to knit its wireless and TV offering. According to a note from Wall Street Journal, it is a move that has come at a competitive time in the industry as various carrier companies are seeking a new way to attract customers and retain the existing subscribers without cutting any fee.  

This new AT&T plan will be starting from 12 Jan, offering new and existing users a TV and unlimited wireless bundle. The plan starts from $180 for the four-member package and the first subscriber fee is $100 and each additional subscriber is $40 with the fourth customer free. Those who will cross the limit of 22GB in one month will have a throttled internet speed during peak network traffic periods.

The new AT&T unlimited data plan targets DirecTV customers. The company is bringing back the plan for the first time in five years as a part of the new offer for users that sign up for its U-Verse or DirecTV service package. 

Verizon had already stated that AT&T’s surging growth in data traffic required costly network upgrades and unlimited deals that prevented carrier firms from collecting fees as usage rose. Nowadays, there has been an evident surge in mobile data consumption, especially from those watching video from services like YouTube and Netflix.

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