Verizon Wireless 2014 Annual Report Download - page 24

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22
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.
2014 Compared to 2013
Global Wholesale revenues decreased $0.4 billion, or 5.6%, during 2014
compared to 2013 primarily due to a decline in data revenues and tra-
ditional voice revenues. Data revenue declines were driven by the
continuing demand for high-speed digital data services from ber-to-
the-cell customers upgrading their core data circuits to Ethernet facilities.
As a result of the customer migrations, at December 31, 2014, the number
of core data circuits experienced a 14.2% decline compared to December
31, 2013. The traditional voice revenue declines are primarily due to a
decreaseinMOUsandtheeectoftechnologysubstitution. During
2014, we also experienced a 6.2% decline in domestic wholesale connec-
tions. Also contributing to the decline in voice revenues is the continuing
contraction of market rates due to competition.
2013 Compared to 2012
Global Wholesale revenues decreased $0.5 billion, or 7.0%, 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.
Global Enterprise
Global Enterprise oers Strategic services and other core communica-
tions services to medium and large business customers, multinational
corporations and state and federal government customers.
2014 Compared to 2013
Global Enterprise revenues decreased $0.5 billion, or 3.5%, during 2014
compared to 2013 primarily due to a $0.5 billion, or 11.9%, decline related
to lower voice services and data networking revenues, which consist of
traditional circuit-based services such as frame relay, private line and
legacy voice and data services. These core services declined compared to
2013 as customers continued to migrate to next generation IP services.
Also contributing to the decrease was the contraction of market rates
due to competition and a decline in Core customer premise equipment
revenues. This decrease was partially oset by an increase in Strategic
services revenues of $0.2 billion, or 2.3%, primarily due to growth in our
application services, such as our cloud and data center oerings and con-
tact center solutions.
2013 Compared to 2012
Global Enterprise revenues decreased $0.4 billion, or 2.7%, 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 legacy voice and data ser-
vices. These core services declined in 2013 compared to 2012 as our
customer base continued to migrate to next generation IP services. 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. This decrease
was partially offset by growth in Strategic services revenues, which
increased $0.4 billion, or 5.2%, 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued