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3
VERIZON COMMUNICATIONS INC. 2007 ANNUAL REPORT
from฀sources฀ as฀varied฀as฀J.D.฀Power฀ and฀ Associates,฀PC฀ World฀and฀Wireless฀ Week.฀Our฀
reputation฀for฀quality฀is฀critical฀in฀attracting฀a฀large฀and฀growing฀base฀of฀customers฀who฀
buy฀ the฀ Verizon฀ brand:฀ we฀ ended฀ the฀ year฀ with฀ 65.7฀ million฀ wireless฀ subscribers,฀ 8.2฀
million฀broadband฀customers,฀close฀to฀1฀million฀FiOS฀TV฀subscribers,฀and฀large฀business฀
sales฀to฀97฀percent฀of฀the฀Fortune฀500.฀
We฀achieved฀this฀growth฀by฀expanding฀into฀new฀markets,฀innovating,฀and฀delivering฀
more฀ value฀ to฀ our฀ customers.฀ Wireless฀ revenues฀ were฀ $43.9฀ billion,฀ up฀ more฀ than฀ 15฀
percent฀ in฀ 2007,฀ driven฀ by฀ the฀ tremendous฀ 65฀ percent฀ growth฀ in฀ data฀ revenues฀ from฀
such฀services฀as฀text฀and฀picture฀messaging,฀video,฀music,฀and฀broadband฀access.฀Data฀
accounted฀for฀about฀one-fth฀of฀service฀revenues฀in฀2007,฀and฀we฀believe฀this฀is฀just฀the฀
beginning฀of฀the฀growth฀curve฀for฀wireless฀multimedia฀services.฀Within฀ Wireline,฀we฀
experienced฀growth฀in฀the฀consumer฀space฀in฀2007฀as฀a฀result฀of฀broadband฀and฀video฀
revenues,฀which฀few฀would฀have฀predicted฀a฀ few฀years฀ago.฀Clearly,฀the฀driver฀here฀is฀
the฀success฀ we฀are฀ having฀with฀FiOS฀–฀our฀ super-high-speed฀network฀that฀takes฀ber฀
all฀ the฀ way฀ to฀ customers’฀ homes฀ –฀ which฀ PC฀ World฀ listed฀ as฀ #4฀ on฀ its฀ list฀ of฀ the฀ 100฀
best฀products฀of฀2007.฀Customers฀are฀responding฀enthusiastically฀to฀the฀superior฀speed,฀
quality฀and฀ product฀line-up฀that฀FiOS฀delivers,฀and฀we฀are฀continuing฀to฀roll฀out฀new฀
services฀that฀take฀advantage฀of฀its฀capabilities.฀Our฀global฀business฀operations,฀bolstered฀
by฀our฀acquisition฀of฀MCI฀in฀2006,฀have฀delivered฀ve฀straight฀quarters฀of฀year-over-year฀
pro฀forma฀revenue฀growth,฀driven฀by฀26฀percent฀growth฀in฀strategic฀services฀–฀private฀IP,฀
managed฀services,฀security,฀and฀hosting฀–฀that฀constitute฀an฀increasingly฀large฀share฀of฀
our฀base฀in฀this฀market.฀We฀are฀continuing฀to฀strengthen฀our฀vertical฀capabilities฀in฀this฀
market,฀as฀ we฀did฀earlier฀this฀year฀with฀ our฀acquisition฀of฀the฀managed฀security฀rm,฀
Cybertrust,฀and฀we฀are฀expanding฀our฀ability฀to฀serve฀global฀customers.
To฀accelerate฀our฀productivity฀and฀help฀us฀put฀all฀our฀capabilities฀to฀work฀for฀the฀cus-
tomer,฀we฀implemented฀a฀new฀corporate฀structure฀last฀year฀to฀coordinate฀functions฀such฀
as฀ marketing,฀ IT,฀ network฀ planning฀ and฀ purchasing฀ across฀ Verizon.฀ Working฀ together,฀
these฀ organizations฀ are฀ identifying฀ opportunities฀ for฀ productivity฀ improvement฀ and฀
implementing฀the฀corporate-wide฀structural฀solutions฀that฀truly฀take฀advantage฀of฀our฀
scale฀and฀scope.฀One฀example฀of฀this฀disciplined฀approach฀to฀improving฀business฀effec-
tiveness฀is฀the฀performance฀of฀Verizon฀Services฀Operations,฀launched฀in฀the฀fall฀of฀2005฀
and฀recently฀ named฀the฀ best฀ new฀shared฀services฀organization฀of฀ 2007.฀ This฀ unit฀ has฀
helped฀reduce฀operating฀costs฀for฀such฀shared฀services฀as฀nance,฀real฀estate,฀and฀supply฀
chain฀ operations,฀ which฀ has฀ contributed฀ to฀ Verizon’s฀ expanding฀ operating฀ income฀฀
$2.2
$4.5
$7.4
Wireless
Data Revenue
(billions)
05 06 07
$50.11 $50.44
$51.57
Wireless Retail
ARPU
05 06 07