Verizon Communications reported that its net income rose 15.5%, to $1.59 billion, in the third quarter from the same quarter a year ago. Revenue increased 3.9% to $29 billion. Verizon’s chairman and chief executive Lowell C. McAdam said that the company remained “solidly on track to meet our financial objectives for the year.”
Verizon Wireless, a joint venture with Vodafone of Britain, reported a record profit. The wireless business sold 6.8 million smartphones in the quarter, compared with 5.6 million a year ago. Verizon’s revenue per account rose to $145.42 a month, an increase of 6.5%. Verizon Communications is based in New York.
Its new shared-data plans and strong smartphone sales are paying off. Its shared-data plans allow customers to pay for a single pool of data and share it across multiple smartphones, laptops, and tablets. These types of plans can be beneficial for families with multiple devices, but are more expensive for people who have an individual plan.
Carriers are relying on generating more money from each customer as subscriber growth is slowing, because many people who want a cellphone already own one. Verizon’s shared-data plans generate revenue from what customers use most: wireless data to send e-mail, browse the Web, and stream video.
Its faster fourth-generation Long Term Evolution, or LTE, network is another factor helping Verizon make more money from each customer. Customers who are using a smartphone on the older third-generation network and still have the company’s old unlimited data plans must give up those plans to upgrade to phones compatible with the newer network. Verizon expects customers with shared data plans using the faster LTE network to want to pay for increasing amounts of data over time.
Verizon is hoping to bring in more money from wireless customers by encouraging people to pay for more data. Fran Shammo, Verizon’s chief financial officer, said, “It is going to be more important that people will start to upgrade in their tiers as they start to really realize the benefits of the LTE networks. Over the future time, as they add more devices, they are going to have to buy up into tiers. So again, you will see the revenue increase there.”