Verizon Wireless 2013 Annual Report Download - page 23

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Global Enterprise
Global Enterprise oers Strategic services including network products
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.
2013 Compared to 2012
Global Enterprise revenues decreased $0.6 billion, or 3.9%, during 2013
compared to 2012 primarily due to a $0.5 billion, or 27.1%, decline in Core
customer premise equipment revenues as well as lower voice services
and data networking revenues, which consist of traditional circuit-based
servicessuchasframerelay,privatelineandAsynchronousTransferMode
(ATM)services.Thesecoreservicesdeclinedin2013comparedto2012
as our customer base continued to migrate to next generation IP ser-
vices. The decline in customer premise equipment revenues reected
our focus on improving margins by continuing to de-emphasize sales of
equipment that are not part of an overall enterprise solutions bundle. The
decline is also due to lower revenue from public sector customers. This
decrease was partially oset by growth in Strategic services revenues,
which increased $0.4 billion, or 4.6%, during 2013 compared to 2012
primarily due to growth in advanced services, such as contact 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.
2012 Compared to 2011
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 unfavorable
impact of foreign currency translation. Core services declined compared
to the similar period in 2011 as our customer base continued to migrate
to next generation IP services. The decline in customer premise equip-
ment revenues reected our focus on improving margins by continuing
to de-emphasize sales of equipment that are not part of an overall
enterprise solutions bundle. This decrease was partially oset by higher
Strategic services revenues. Strategic services revenues increased pri-
marily 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
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.
2013 Compared to 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MOUsanda5.2%declineindomesticwholesale
connections. The traditional voice product reductions are primarily due
to competitors de-emphasizing their local market initiatives coupled with
the eect of technology substitution. Also contributing to the decline
in voice revenues is the continuing contraction of market rates due to
competition. Partially osetting the overall decrease in wholesale rev-
enue was a 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. As a
result of the customer upgrades, the number of core data circuits experi-
enced an 11.3% decline compared to the similar period in 2012.
2012 Compared to 2011
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5.3% declineindomestic wholesaleconnec-
tions. The traditional voice product reductions are primarily due to the
continued impact of competitors de-emphasizing their local market
initiatives coupled with the impact of technology substitution. Also con-
tributing to the decline in voice revenues is the elimination of low margin
international products and the continuing contraction of market rates due
to competition. Partially osetting the overall decrease in wholesale rev-
enue was a 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. As a
result of the customer upgrades, the number of core data circuits experi-
enced a 9.6% decline compared to the similar period in 2011. We expect
Global Wholesale revenue to continue to decline approximately 10% per
quarter compared to the similar period in 2011, as we believe that the
continued decline in core products will only be partially oset by growth
in Ethernet and IP services.
Other
Other revenues include such services as local exchange and long dis-
tance services outside of our network footprint and operator services
which are no longer being marketed. The decrease in revenues from
other services during 2013 and 2012 was primarily due to reduced vol-
umes outside of our network footprint.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued