Verizon Wireless 2008 Annual Report Download - page 18

Consolidated Revenues
(dollars in millions)
Years Ended December 31, 2008 2007 % Change 2007 2006 % Change
Domestic Wireless $ 49,332 $ 43,882 12.4 $ 43,882 $ 38,043 15.3
Wireline
Verizon Telecom 29,912 30,780 30,780 31,759
Verizon Business 21,126 21,109 21,109 20,546
Intrasegment eliminations (2,824) (2,760) (2,760) (2,801)
48,214 49,129 (1.9) 49,129 49,504 (0.8)
Corporate and Other (192) 458 nm 458 635 (27.9)
ConsolidatedRevenues $ 97,354 $ 93,469 4.2 $ 93,469 $ 88,182 6.0
nm – not meaningful
2008 Compared to 2007
Consolidated revenues in 2008 increased by $3,885 million, or 4.2%, com-
pared to 2007. This increase was primarily the result of continued strong
growth at Domestic Wireless.
Domestic Wireless’s revenues in 2008 increased by $5,450 million, or
12.4%, compared to 2007 due to increases in service revenues and
equipment and other revenue. Service revenues during 2008 increased
$4,619 million, or 12.2%, compared to 2007 primarily due to increases in
data revenues and customers. Equipment and other revenue increased
principally as a result of increases in the number of existing customers
upgrading their wireless devices. Total data revenues increased by $3,265
million, or 44.2% in 2008 compared to 2007. There were 72.1 million total
Domestic Wireless customers as of December 31, 2008, an increase of
9.7% from December 31, 2007. Domestic Wireless’s retail customer base as
of December 31, 2008 was approximately 70 million, a 9.9% increase from
2007, and represented approximately 97.2% of its total customer base.
ServiceARPUincreasedby1.2%to$51.59in2008comparedto2007,
primarilyattributabletoincreasesinDataARPUdrivenbyincreaseduse
ofourmessagingandotherdataservices.RetailServiceARPUincreased
by 0.6% to $51.88 in 2008 compared to 2007.
Wireline’s revenues in 2008 decreased $915 million, or 1.9%, compared
to 2007, primarily driven by lower demand and usage of our basic local
exchange and accompanying services, partially offset by continued
growth from broadband and strategic services. During 2008, we added
660,000 net new broadband connections, including 956,000 net new
FiOS data connections, offset by a net decline of 296,000 high speed
Internet connections. As of December 31, 2008 we served 8,673,000
connections, including 2,481,000 for FiOS Internet, representing an 8.2%
increase in total broadband connections from December 31, 2007. In
addition, we added 975,000 net new FiOS TV customers in 2008, for a
total of 1,918,000 at December 31, 2008. The revenue growth at Verizon
Telecom driven by broadband and video services was more than offset by
a 3,722,000 decline in subscriber access lines resulting from competition
andtechnologysubstitution,includingwirelessandVoIP.Revenuesat
Verizon Business increased primarily due to higher demand for Internet-
related product offerings, specifically Private IP products and the impact
of foreign currency exchange rates on services billed in local currencies,
partially offset by lower voice revenues.
2007 Compared to 2006
Consolidated revenues in 2007 increased by $5,287 million, or 6.0%, com-
pared to 2006. This increase was primarily the result of continued strong
growth at Domestic Wireless.
Domestic Wireless’s revenues in 2007 increased by $5,839 million, or
15.3%, compared to 2006 due to increases in service revenues and
equipment and other revenue. Equipment and other revenue increased
principally as a result of increases in the number of existing customers
upgrading their wireless devices. Total data revenues increased by $2,911
million, or 65.0% in 2007 compared to 2006 driven by increased use of our
messaging and other data services. There were approximately 65.7 million
total Domestic Wireless customers as of December 31, 2007, an increase of
11.3% from December 31, 2006. Domestic Wireless’s retail customer base
as of December 31, 2007 was approximately 63.7 million, a 12.2% increase
from 2006, and represented approximately 97% of its total customer base.
ServiceARPUincreasedby2.3%to$50.96in2007comparedto2006,pri-
marilyattributabletoincreasesindatarevenuepercustomer.RetailARPU
increased by 2.2% to $51.57 in 2007 compared to 2006.
Wireline’s revenues in 2007 decreased $375 million, or 0.8%, compared
to 2006, primarily driven by lower demand and usage of our basic local
exchange and accompanying services, partially offset by continued
growth from broadband and strategic services. During 2007, we added
1,227,000 new broadband connections, an increase of 18.1%, including
847,000 for FiOS, for a total of 8,013,000 lines at December 31, 2007. In
addition, we added 736,000 FiOS TV customers in 2007, for a total of
943,000atDecember31,2007.RevenuesatVerizonBusinessincreased
during 2007 compared to 2006 primarily due to higher demand for
strategic products. These increases were offset by a decline in voice
revenues at Verizon Telecom due to a 3.5 million decline in subscribers
resulting from competition and technology substitution, such as wireless
and VoIP, including those subscribers who have migrated to our other
service offerings.
16
Management’s Discussion and Analysis
ofFinancialConditionandResultsofOperations continued