Verizon Wireless 2013 Annual Report Download - page 15

2012 Compared to 2011
The increase in consolidated revenues during 2012 compared to 2011
wasprimarilyduetohigherrevenuesat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 oset-
ting these increases were lower Global Wholesale and Global Enterprise
Core revenues at our Wireline segment.
Wireless’ revenues increased during 2012 compared to 2011 due to
growth in both service and equipment and other revenue. Service rev-
enue 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smartphones.Retailpostpaid
connections per account increased during 2012 compared to 2011 pri-
marily due to the increased use of tablets and other Internet devices. In
2012, the increase in retail postpaid connection net additions was pri-
marily 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 reect
the launch of our Share Everything plans coupled with new device intro-
ductions 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oset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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
oset 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 oerings.
Global Wholesale revenues decreased during 2012 compared to 2011
primarily due to a decline in traditional voice revenues as a result of
decreased MOUs and a decline in domestic wholesale connections,
partially offset by continuing demand for high-speed digital data
services from ber-to-the-cell customers upgrading their core data cir-
cuits 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 outside of our network footprint.
13
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
2013 Compared to 2012
The increase in consolidated revenues during 2013 compared to 2012
wasprimarilyduetohigherrevenuesatWireless,aswellashigherMass
MarketsrevenuesdrivenbyFiOSservicesandincreasedStrategicser-
vices revenues within Global Enterprise at our Wireline segment. Partially
osetting these increases were lower Global Enterprise Core and Global
Wholesale revenues at our Wireline segment.
Wireless’revenuesincreased$5.2billion,or6.8%,during2013compared
to 2012 due to growth in service revenue. Service revenue increased
during 2013 compared to 2012 primarily driven by higher retail postpaid
service revenue, which increased largely as a result of an increase in retail
postpaid connections as well as the continued increase in penetration
of smartphones, tablets and other Internet devices through our Share
Everythingplans.Retailpostpaidconnectionnetadditionsdecreased
during 2013 compared to 2012 primarily due to an increase in our retail
postpaid connection churn rate, partially oset by an increase in retail
postpaidconnectiongrossadditions.Retailpostpaidconnectionsper
account increased as of December 31, 2013 compared to December
31, 2012 primarily due to the increased penetration of tablets and other
Internet devices.
Wireline’srevenuesdecreased$0.6billion,or1.4%,during2013com-
pared to 2012 primarily driven by declines in Global Enterprise Core
andGlobalWholesale,partiallyosetbyhigherMassMarketsrevenues
drivenbyFiOSservicesandincreasedStrategicservicesrevenueswithin
Global Enterprise.
MassMarketsrevenuesincreased$0.6billion,or3.7%,during2013com-
paredto2012duetotheexpansionofFiOSservices(Voice,Internetand
Video) as well as changes in our pricing strategies, partially oset by the
continued decline of local exchange revenues.
Global Enterprise revenues decreased $0.6 billion, or 3.9%, during 2013
compared to 2012 primarily due to a decline in Core customer premise
equipment revenues and lower voice services and data networking rev-
enues. This decrease was partially oset by growth in Strategic services
revenues, primarily due to an increase in advanced services, such as con-
tact center solutions, IP communications, and our cloud and data center
oerings as well as revenue from a telematics services business that we
acquired in the third quarter of 2012.
Global Wholesale revenues decreased $0.5 billion, or 7.3%, during 2013
compared to 2012 primarily due to a decline in traditional voice revenues
asaresultofdecreasedminutesofuse(MOUs)andadeclineindomestic
wholesale connections, partially oset by continuing demand for high-
speed digital data services from ber-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 2013 compared to 2012 primarily due
to reduced volumes outside of our network footprint.