http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/ Engadget Comments for Verizon lost $653 million last quarter in spite of increasing revenues http://www.engadget.com/media/feedlogo.gif http://www.engadget.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:31AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
]]>Jan 27th 2010 3:33AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:46AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Just because another operators pays Apple for iFanboy instead of fixing Swiss cheese like coverage map! ]]>Jan 27th 2010 4:50AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Talk about mindshare! Unbelievable!]]>Jan 27th 2010 5:12AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Wow, I was expecting more AT&T fanboys to come and rain all over this parade. Guess not.

Hopefully, the new Nationwide Unlimited plan (dropped from $99.99 to $69.99) will get more people to join up. Hoping for the best, for the best network out there.]]>Jan 27th 2010 9:22AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 12:46PMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/It was irresponsible of me to mispell irresponsible ;)]]>Jan 27th 2010 1:10PMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:31AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:37AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:38AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
I actually upranked you for posting mid-comment. I've been reading Engadget for years. First time seeing that.]]>Jan 27th 2010 10:31AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:31AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:47AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Verizon Wireless isn't the same company as Verizon, true story.]]>Jan 27th 2010 6:08AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 8:09AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Verizon Wireless is a the wireless business of Verizon Communications... apparently it's a combination of assets from Verizon, Vodafone and a few other entities, who operate under the Verizon name, but Verizon Wireless is affiliated to and part subsidiary of Verizon Communications.

The irony in all of this is that Verizon is the former Bell Atlantic and NYNEX, both former AT&T fragments from the enforced breakup. When Verizon picks on AT&T, it's a little funny, kid picking on their mom / dad sort of thing.]]>Jan 27th 2010 8:11AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:47AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:49AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 3:52AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 4:28AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
They don't like paying the Apple tax, so they picked up the Palm Pre Plus. And they are getting more for their money with 512 MB of RAM.]]>Jan 27th 2010 4:41AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
that's the hope right? haha right....]]>Jan 27th 2010 5:13AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 4:29AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Verizon's total profit for the year is: $3.65 billion.

> $1.64 billion in the 1st Quarter - Profit
> $1.48 billion in the 2rd Quarter - Profit
> $1.18 billion in the 3rd Quarter - Profit
> $653 billion in the 4rd Quarter - Loss

Verizon does not need Apple. Verizon is a $100 Billion company and they are a profitable company. They are adding millions of new subscribers every year. The $653 million is a 3 month bill. They made $1.18 billion in profit the previous 3 months as shown above. They are currently investing heavily in their infrastructure, or else their profit would have been much greater for the year.]]>Jan 27th 2010 5:02AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Verizon ....needs ...Apple? really?! not only is your argument baseless, but you seem to be conveniently forgetting that Verizon famously turned down the 1st generation iPhone and remained a top competitor in the Carrier business for the past years.

hope you get downranked into an oblivion]]>Jan 27th 2010 5:13AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Perhaps "Needs" was the wrong word, but I seriously think if their Execs or Shareholders have any say in things, they would be daft not to indulge in a little Apple whilst the company is riding high at the top of its game!

P.S. I don't think Verizon turned down the iPhone, they simply lost out on the exclusivity deal because they couldn't meet the requirements of Apple at the time.

"Oblivion eh?" , You care that much about my comment that you have "hope" about my comment being down ranked!?!

Trust me, I will not be losing any sleep about that :-)
]]>Jan 27th 2010 5:26AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Verizon and many other carriers in other countries turned down apple the first time around, that's why 1g iphone wasn't in every country. Once everyone saw it was a success people were willing to bargain, apple also relaxed some of the terms of the agreement.

That being said, Verizon absolutely doesn't "need" the iPhone at all, but they would be foolish to turn away the huge piles of money that the iPhone would bring into the company.]]>Jan 27th 2010 12:15PMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/it's 653 million not billion?]]>Jan 27th 2010 3:25PMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Not quite. The quarterly numbers aren't wrong (probably, they look right, meh) but "investing" is not a P&L activity, so it doesn't show up in your Net Income number.

The vast majority of costs for the network improvement are capitalized, which means they're treated like a new asset and then amortized over the life of the asset. The amortization (or depreciation, if it's a physical asset) hits Net Income, to the tune of 1/20th or so of the total cost per year.

The real issue for Verizon is not necessarily their Net Income but their Free Cash Flow. Essentially, take Operating Income, add back Depreciation and Amortization, make some adjustments for changes in Accounts Receivables (if the asset value drops, that means cash has come in and vice-versa) and then subtract Capital Expenditures.

Free Cash Flow represents the amount of cash that Verizon has on hand to do things like make interest payments or pay off debt, invest further into the business or return capital to shareholders. When this goes to zero or negative, they're burning through more cash than they make. When it's strongly positive, they can pay dividends, repurchase shares or build a war chest.

Net Income isn't unimportant, just not 100% of the picture. It just makes the news.]]>Jan 27th 2010 4:05PMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
I know - typo! Thanks.]]>Jan 28th 2010 3:53AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Thanks for the lesson in Economics. I am an Engineer, so I simply used common sense, and tried to make a quick point. But I generally get your point, thanks again!]]>Jan 28th 2010 4:01AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
And they've taken enough money from me, so if they're losing money, ....too bad! Maybe they shouldn't have spent so much money on ridiculous Droid commercials. though I gotta hand it to them, at least they don't waste money on legal actions like AT&T does - they would have been better off spending that money on improving their data coverage]]>Jan 27th 2010 5:11AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 7:11AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
No offense intended, but Instead of lamenting the lack of knowledge of the average peasant, why not spend the energy briefly describing the methodology or a link?]]>Jan 27th 2010 8:15AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/The point is that Engadget just drops a number they got out of the SEC filing and then infers that VZW is gouging customers. Nowhere did the author explain what "Cash expense per customer" means, how it compares to "average revenue per retail user", or how those numbers would be reconciled (customer & user are different).

If you read the SEC filing it is explicitly defined:
"Verizon Wireless’s cash expense per customer is determined by subtracting equipment and other revenue from Verizon Wireless’s cost of sales and services and selling, general and administrative expenses and dividing the result by average customers during the period."

Furthermore, businesses will write off a loss in Q4 to decrease their overall profit for the fiscal year and thus decrease their tax liability. VZW has probably been accruing costs for a future 4G rollout for several quarters and decided to write it off in Q4 2009. If they decided to hold those costs until 2010 they would show an immensely profitable year for fiscal year 2009 followed by a huge loss for 2010 which is not ideal. Investors like slow and steady growth, not huge peaks and troughs.]]>Jan 27th 2010 10:11AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Thanks for the explanation. Glad you're not a douche. And Curious G, that was certainly not directed at you.]]>Jan 27th 2010 10:34AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
SEC disclosures aside, industry convention for ARPU (Average Revenue Per User) and CCU (Cash Cost per User), which are analogous to Verizon's measures, are based on an average subscriber count.

Service and Other Revenue are usually tallied (Equipment Revenue is excluded because it's one-time in nature) and divided by average subs over the period (be it a month, quarter, or year). The resulting quotient is ARPU, as generally defined. In fact, were Verizon to modify that calculation for use in their filings, every analyst and investor would re-normalize the measure to the industry standard.

Network costs, customer care (i.e. call centers), specific recurring product costs and general corporate overhead (billing, administrative, etc) are summed and divided by average subs in the period to determine CCU. CCU represents the allocatable recurring costs, excluding anything that is capitalized, to maintain a subscriber on the network.

ARPU less CCU provides you with a rough estimate of per-subscriber margin, on an operating basis only.

Contrary to the Engadget piece, subsidy for equipment is not included in CCU. Subsidy is one-time in nature and therefore is included in a different metric, sometimes called CPGA (Cost Per Gross Add) or CPA (Cost Per Activation). This metric includes all of the one-time selling costs, from equipment subsidies to rebates to salaries/wages in the stores.

Again, regardless of what is reported by the company in the regular filings, all interested parties are highly likely to normalize to the standard industry definitions. As ARPU, CCU and CPGA are non-GAAP measures, they are required to be explicitly defined if used as part of any public disclosure. A common consequence of this is the overly-precise definition from Accounting creating some confusion among those less deeply entrenched with the company's books.

Vladislav was a bit off, but not far from the mark. Hope this helps to further clear up any confusion.]]>Jan 27th 2010 3:56PMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/
Joe mama - thanks. Perhaps I should have referenced the authors vice using the term "poster" , which is how I intended my comment.]]>Jan 28th 2010 8:45AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 9:24AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 10:01AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 10:20AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 10:43AMhttp://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/http://www.engadget.com/2010/01/27/verizon-lost-653-million-last-quarter-in-spite-of-increasing-re/Jan 27th 2010 2:24PM