Verizon Wireless 2010 Annual Report Download - page 19

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Consolidated Revenues
(dollars in millions)
Increase/(Decrease)
Years Ended December 31, 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Domestic Wireless
Service revenue $ 55,629 $ 52,046 $ 42,602 $ 3,583 6.9 % $ 9,444 22.2 %
Equipment and other 7,778 8,279 6,696 (501) (6.1) 1,583 23.6
Total 63,407 60,325 49,298 3,082 5.1 11,027 22.4
Wireline
Mass Markets 16,256 16,115 15,831 141 0.9 284 1.8
Global Enterprise 15,669 15,667 16,601 2 – (934) (5.6)
Global Wholesale 8,393 9,155 9,832 (762) (8.3) (677) (6.9)
Other 909 1,514 2,059 (605) (40.0) (545) (26.5)
Total 41,227 42,451 44,323 (1,224) (2.9) (1,872) (4.2)
Corporate, eliminations and other 1,931 5,032 3,733 (3,101) (61.6) 1,299 34.8
Consolidated Revenues $ 106,565 $ 107,808 $ 97,354 $ (1,243) (1.2) $ 10,454 10.7
TheincreaseinDomesticWireless’revenuesduring2010comparedto
2009 was primarily due to growth in service revenue. Service revenue
increased during 2010 compared to 2009 primarily due to an increase in
total customers since January 1, 2010, as well as continued growth in our
dataARPU,partiallyoffsetbyadeclineinvoiceARPU.
Total wireless data revenue was $19.6 billion and accounted for 35.1%
of service revenue during 2010, compared to $15.6 billion and 29.9%
during 2009. Total data revenue continues to increase as a result of the
increased penetration of data offerings, in particular for e-mail and web
services resulting in part from increased sales of smartphone and other
data-capable devices. Voice revenue decreased as a result of continued
declinesinourvoiceARPU,partiallyoffsetbyanincreaseinthenumber
of customers.
Equipment and other revenue decreased during 2010 compared to 2009
due to a decrease in the number of equipment units sold, which resulted
from a decrease in customer gross additions.
ThedecreaseinWireline’srevenuesduring2010comparedto2009was
primarily due to lower Global Wholesale and Other revenue, partially
offset by an increase in Mass Markets revenue. The decrease in Global
Wholesale revenues during 2010 compared to 2009 was primarily due to
decreased MOUs in traditional voice products, increases in voice termina-
tion pricing on certain international routes, which negatively impacted
volume, and continued rate compression due to competition in the
marketplace. The decrease in Other revenue during 2010 compared to
2009 was primarily due to reduced business volumes, including former
MCI mass market customer losses. The increase in Mass Markets revenue
during 2010 compared to 2009 was primarily driven by the expansion of
consumer and business FiOS services (Voice, Internet and TV), which are
typically sold in bundles, partially offset by the decline of local exchange
revenues principally as a result of a decline in switched access lines.
Global Enterprise revenues during 2010 compared to 2009 were essen-
tially unchanged. Higher customer premises equipment and strategic
networking revenues, were offset by lower local services and traditional
circuit-based revenues.
2010 Compared to 2009
The decrease in Consolidated revenues during 2010 compared to 2009
was primarily due to the sale of divested operations and declines in rev-
enues at our Wireline segment resulting from switched access line losses
and decreased MOUs in traditional voice products, partially offset by
higher revenues in our growth markets.
Corporate, eliminations and other during 2010 included a one-time non-
cash adjustment of $0.2 billion primarily to reduce wireless data revenues.
This adjustment was recorded to properly defer previously recognized
wireless data revenues that will be earned and recognized in future
periods. As the amounts involved were not material to the consolidated
financial statements in the current or any previous reporting period, the
adjustmentwasrecordedduringthesecondquarterof2010(see“Other
Items”).Inaddition,theresultsofoperationsrelatedtothedivestitures
included in Corporate, eliminations and other are as follows:
(dollars in millions)
Years Ended December 31, 2010 2009 2008
Impact of Divested Operations
Operating revenues $ 2,407 $ 5,297 $ 4,084
Cost of services and sales 574 1,288 1,076
Selling, general and administrative expense 665 1,356 895
Depreciation and amortization expense 413 884 916
17
Management’sDiscussionandAnalysis
ofFinancialConditionandResultsofOperations – As Adjusted continued