Verizon Wireless 2011 Annual Report Download - page 39

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Global Enterprise
Global Enterprise offers strategic services including networking prod-
ucts and solutions, advanced communications services, and other core
communications services to medium and large business customers, mul-
tinational corporations and state and federal government customers.
2011 Compared to 2010
Global Enterprise revenues increased during 2011 compared to 2010 pri-
marily driven by higher strategic services revenues, in part due to the
inclusion of the revenues of Terremark, partially offset by lower local
services and traditional circuit-based revenues and decreased revenues
from the sale of customer premise equipment. Strategic services rev-
enue increased $1.0 billion, or 15.2%, during 2011 compared to 2010
primarily due to growth in advanced services, such as managed net-
work, call center, IP communications and our cloud offerings. Strategic
servicescontinuetobeGlobalEnterprise’sfastestgrowingsuiteofoffer-
ings. Traditional circuit-based services such as frame relay, private line and
ATMservicesdeclinedcomparedtothesimilarperiodlastyearasour
customer base continues to migrate to next generation IP services. The
decline in customer premise equipment revenues reflects our focus on
improving margins by de-emphasizing sales of equipment that are not a
part of an overall enterprise solutions bundle.
2010 Compared to 2009
Global Enterprise revenues were essentially unchanged during 2010
compared to 2009. Higher customer premise equipment and strategic
networking revenues were offset by lower local services and tradi-
tional circuit-based revenues. Long distance revenues declined due to
the negative effects of the continuing global economic conditions and
competitive rate pressures. In addition to increased customer premise
equipment revenues, strategic enterprise services revenue increased $0.4
billion, or 6.3%, during 2010 compared to 2009 primarily due to higher
information technology, security solution and strategic networking rev-
enues.StrategicenterpriseservicescontinuetobeGlobalEnterprise’s
fastest growing suite of offerings. Traditional circuit-based services such
asframerelay,privatelineandATMservicesdeclinedin2010compared
to 2009 as our customer base continued its migration to next generation
IP services.
Global Wholesale
Global Wholesale provides communications services including data,
voice and local dial tone and broadband services primarily to local, long
distance and other carriers that use our facilities to provide services to
their customers.
2011 Compared to 2010
The decrease in Global Wholesale revenues during 2011 compared to 2010
was primarily due to a $0.4 billion decline in international voice revenues
asaresultofdecreasedMOUsintraditionalvoiceproductsasaresult
of increases in voice termination pricing on certain international routes,
which negatively impacted volume, and continued rate compression due
to competition in the marketplace. Switched access and interexchange
wholesaleMOUsdeclinedprimarilyasaresultofwirelesssubstitution
and connection losses. Domestic wholesale connections declined by
8.3% as of December 31, 2011 compared to December 31, 2010 due to
the continued impact of competitors deemphasizing their local market
initiatives coupled with the impact of technology substitution. Voice and
local loop services declined during 2011 compared to 2010. Partially
offsetting the overall decrease in wholesale revenue was a continuing
demand for high-speed digital data services primarily due to fiber-to-
the-cell customers upgrading their core data circuits to Ethernet facilities.
As a result of the upgrading customers, the number of DS1/DS3 circuits
experienced a 9.5% decline as compared to the similar period in 2010.
2010 Compared to 2009
The decrease in Global Wholesale revenues during 2010 compared to
2009wasprimarilyduetodecreasedMOUsintraditionalvoiceproducts,
primarily as a result of increases in voice termination pricing on certain
international routes, which negatively impacted volume, and continued
rate compression due to competition in the marketplace. Switched access
andinterexchangewholesaleMOUsdeclinedprimarilyasaresultofwire-
less substitution and connection losses. Domestic wholesale connections
declined by 9.0% as of December 31, 2010 compared to December 31,
2009 due to the continued impact of competitors deemphasizing their
local market initiatives coupled with the impact of technology substi-
tution, as well as the continued level of economic pressure. Voice and
local loop services declined during 2010 compared to 2009. Continuing
demand for high-capacity, high-speed digital services was partially offset
by lower demand for older, low-speed data products and services. As of
December 31, 2010, customer demand, as measured in DS1 and DS3
circuits, for high-capacity and high-speed digital data services increased
4.6% compared to 2009.
Other
Other revenues include such services as local exchange and long distance
servicesfromformerMCImassmarketcustomers,operatorservices,card
services and supply sales. The decrease in revenues from other services
during 2011 and 2010 was primarily due to reduced business volumes,
includingformerMCImassmarketcustomerlosses.
ManagEMEnt’s discussiOn and analYsis
OF Financial cOnditiOn and REsults OF OPERatiOns continued