Verizon Wireless 2014 Annual Report Download - page 20

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Wireless
Our Wireless segment is primarily comprised of Cellco Partnership doing business as Verizon Wireless. Cellco Partnership was formed as a joint ven-
ture in April 2000 by the combination of the U.S. wireless operations and interests of Verizon and Vodafone. Prior to the completion of the Wireless
Transaction,Verizonownedacontrolling55%interestinVerizonWirelessandVodafoneownedtheremaining45%.OnFebruary21,2014,theWireless
Transaction was completed and Verizon acquired 100% ownership of Verizon Wireless. Verizon Wireless provides wireless communications services
across one of the most extensive wireless networks in the United States.
We provide these services and equipment sales to consumer, business and government customers in the United States on a postpaid and prepaid
basis. Postpaid connections represent individual lines of service for which a customer is billed in advance a monthly access charge in return for a
monthly network service allowance, and usage beyond the allowance is billed monthly in arrears. Our prepaid service enables individuals to obtain
wireless services without a long-term contract or credit verication by paying for all services in advance.
All nancial results included in the tables below reect the consolidated results of Verizon Wireless.
Operating Revenues and Selected Operating Statistics (dollarsinmillions,exceptARPA)
Increase/(Decrease)
Years Ended December 31, 2014 2013 2012 2014 vs. 2013 2013 vs. 2012
Retailservice $ 69,501 $ 66,334 $ 61,440 $ 3,167 4.8 % $ 4,894 8.0 %
Other service 3,129 2,699 2,293 430 15.9 406 17.7
Service revenue 72,630 69,033 63,733 3,597 5.2 5,300 8.3
Equipment 10,959 8,111 8,023 2,848 35.1 88 1.1
Other 4,057 3,879 4,112 178 4.6 (233) (5.7)
Equipment and other 15,016 11,990 12,135 3,026 25.2 (145) (1.2)
Total Operating Revenues $ 87,646 $ 81,023 $ 75,868 $ 6,623 8.2 $ 5,155 6.8
Connections ('000):(1)
Retailconnections 108,211 102,799 98,230 5,412 5.3 4,569 4.7
Retailpostpaidconnections 102,079 96,752 92,530 5,327 5.5 4,222 4.6
Net additions in period ('000):(2)
Retailconnections 5,568 4,472 5,917 1,096 24.5 (1,445) (24.4)
Retailpostpaidconnections 5,482 4,118 5,024 1,364 33.1 (906) (18.0)
ChurnRate:
Retailconnections 1.33% 1.27% 1.19%
Retailpostpaidconnections 1.04% 0.97% 0.91%
Account Statistics:
RetailpostpaidARPA $ 159.86 $ 153.93 $ 144.04 $ 5.93 3.9 $ 9.89 6.9
Retailpostpaidaccounts('000)(1) 35,616 35,083 35,057 533 1.5 26 0.1
Retailpostpaidconnectionsperaccount(1) 2.87 2.76 2.64 0.11 4.0 0.12 4.5
(1) As of end of period
(2) Excluding acquisitions and adjustments
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
2014 Compared to 2013
Wireless’total operating revenues increased by $6.6 billion, or 8.2%,
during 2014 compared to 2013 primarily as a result of growth in service
revenue and equipment revenue.
Accounts and Connections
Retail(non-wholesale)postpaidaccountsprimarilyrepresentretailcus-
tomers under contract with Verizon Wireless that are directly served and
managed by Verizon Wireless and use its branded services. Accounts
includeMoreEverythingplansandcorporateaccounts,aswellaslegacy
single connection plans and family plans. A single account may include
monthlywirelessservicesforavarietyofconnecteddevices.Retailcon-
nections represent our retail customer device connections. Churn is the
rate at which service to connections is terminated.
Retailconnectionsunderanaccountmayinclude:smartphones,basic
phones, tablets, LTE Internet (Installed) and other connected devices.
Retailpostpaidconnectionnetadditionsincreasedduring2014com-
pared to 2013 primarily due to an increase in retail postpaid connection
gross additions partially oset by an increase in our retail postpaid con-
nectionchurnrate.Higherretailpostpaidconnectiongrossadditions
were driven by gross additions of tablets as well as 4G LTE smart-
phones. During 2014, our retail postpaid connection net additions
included approximately 4.2 million tablets as compared to 1.4 million
tablets in 2013.
Retail Postpaid Connections per Account
Retailpostpaidconnectionsperaccountiscalculatedbydividingthe
total number of retail postpaid connections by the number of retail
postpaidaccountsasoftheendoftheperiod.Retailpostpaidconnec-
tions per account increased 4.0% as of December 31, 2014 compared to
December 31, 2013 primarily due to the increased penetration of tablets.