Verizon Wireless 2012 Annual Report Download - page 27

Consolidated Revenues
(dollars in millions)
Increase/(Decrease)
Years Ended December 31, 2012 2011 2010 2012 vs. 2011 2011 vs. 2010
Verizon Wireless
Service revenue $ 63,733 $ 59,157 $ 55,629 $ 4,576 7.7 % $ 3,528 6.3 %
Equipment and other 12,135 10,997 7,778 1,138 10.3 3,219 41.4
Total 75,868 70,154 63,407 5,714 8.1 6,747 10.6
Wireline
 MassMarkets 16,702 16,337 16,256 365 2.2 81 0.5
Global Enterprise 15,299 15,622 15,316 (323) (2.1) 306 2.0
Global Wholesale 7,240 7,973 8,746 (733) (9.2) (773) (8.8)
Other 539 750 909 (211) (28.1) (159) (17.5)
Total 39,780 40,682 41,227 (902) (2.2) (545) (1.3)
Corporate, eliminations and other 198 39 1,931 159 nm (1,892) (98.0)
Consolidated Revenues $ 115,846 $ 110,875 $ 106,565 $ 4,971 4.5 $ 4,310 4.0
nm - not meaningful
connections, partially offset by continuing demand for high-speed digital
data services from fiber-to-the-cell customers upgrading their core data
circuits to Ethernet facilities as well as Ethernet migrations from other
core customers.
Other revenues decreased during 2012 compared to 2011 primarily due
toreducedvolumes,includingformerMCImassmarketcustomerlosses.
2011 Compared to 2010
The increase in consolidated revenues during 2011 compared to 2010
was primarily due to higher revenues at Verizon Wireless, the expansion
ofFiOSservicesandincreasedrevenuesfromStrategicservicesatour
Wireline segment. In addition, the increase during 2011 was partially
offset by the impact of divested operations.
TheincreaseinVerizonWireless’revenuesduring 2011comparedto
2010 was primarily due to growth in both service and equipment rev-
enue. Service revenue increased during 2011 compared to 2010 primarily
driven by higher retail postpaid service revenue, which increased as a
result of an increase in retail postpaid connections of 4.3 million in 2011
as well as the continued increase in penetration of higher priced smart-
phones.Retailpostpaidconnectionsperaccountincreasedduring2011
compared to 2010 primarily due to the increased use of tablets and other
Internet devices.
Equipment and other revenue increased during 2011 compared to 2010
due to an increase in the sales volume of smartphones to new and
upgrading customers.
ThedecreaseinWireline’srevenuesduring2011comparedto2010was
primarily driven by declines in Global Wholesale, and Global Enterprise
Core and Other revenues. The decrease in Global Wholesale revenues
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.
Global Enterprise Core revenues declined primarily due to lower cus-
tomer premise equipment revenues, reflecting our focus on improving
margins by de-emphasizing sales of equipment that are not a part of
an overall enterprise solutions bundle, as well as customers migrating
to next generation IP services. Other Wireline revenue also decreased
primarilyasaresultofformerMCImassmarketcustomerlosses.These
revenue declines were partially offset by continued revenue growth in
Global Enterprise Strategic services, in part due to the inclusion of the
revenuesofTerremark,andinMassMarkets,primarilyduetotheexpan-
sionofFiOSservices(Voice,InternetandVideo),partiallyoffsetbythe
decline of local exchange revenues.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
2012 Compared to 2011
The increase in consolidated revenues during 2012 compared to 2011
was primarily due to higher revenues at Verizon Wireless, as well as higher
MassMarketsrevenuesdrivenbyFiOSservicesandincreasedStrategic
services revenues within Global Enterprise at our Wireline segment.
Partially offsetting these increases were lower Global Wholesale and
Global Enterprise Core revenues at our Wireline segment.
VerizonWireless’revenuesincreasedduring2012comparedto2011due
to growth in both service and equipment and other revenue. Service
revenue increased during 2012 compared to 2011 primarily driven by
higher retail postpaid service revenue, which increased largely as a result
of an increase in retail postpaid connections of 5.1 million in 2012, as well
as the continued increase in penetration of higher priced smartphones.
Retailpostpaidconnectionsperaccountincreasedduring2012com-
pared to 2011 primarily due to the increased use of tablets and other
Internet devices. In 2012, the increase in retail postpaid connection net
additions was primarily due to an increase in retail postpaid and prepaid
connection gross additions and improvements in our retail connections
churn rate. Higher retail postpaid connection gross additions during
2012 primarily reflect the launch of our Share Everything plans coupled
with new device introductions during the second half of 2012.
Equipment and other revenue increased during 2012 compared to 2011
primarily due to an increase in device upgrade fees, regulatory fees and
equipment sales.
Wireline’srevenuesdecreasedduring2012comparedto2011primarily
driven by declines in Global Wholesale, Global Enterprise Core and Other
revenues,partiallyoffsetbyhigherrevenuesinMassMarketsdrivenby
FiOSservicesandhigherrevenuesfromStrategicservices.
MassMarketsrevenuesincreasedduring2012comparedto2011due
totheexpansionofFiOSservices(Voice,InternetandVideo)aswellas
changes in our pricing strategy adopted in 2012, partially offset by the
continued decline of local exchange revenues.
Global Enterprise revenues decreased during 2012 compared to 2011 pri-
marily due to lower local services and traditional circuit-based revenues,
a decline in customer premise equipment revenues and the unfavor-
able impact of foreign currency translation. This decrease was partially
offset by higher Strategic services revenues, primarily due to growth in
advanced services, such as managed network solutions, contact center
solutions, IP communications and our cloud and data center offerings.
Global Wholesale revenues decreased during 2012 compared to 2011
primarily due to a decline in traditional voice revenues as a result of
decreasedminutesofuse(MOUs)andadeclineindomesticwholesale