Data Hungry Droids Grow Verizon Revenues

Despite AT&T’s impressive subscriber gains, Verizon Wireless (s vz) remains the largest U.S. carrier in terms of subscribers, according to the company’s quarterly results, announced this morning. The carrier has 92.1 million customers, up 5 percent from a year ago and slightly ahead of the 90.1 million subscribers AT&T (s t) announced yesterday. Even without an iPhone to offer, Verizon actually pulled further away from AT&T for the overall subscriber lead by adding more postpaid customers in the quarter than its close competitor did.

How is Verizon driving such subscriber growth? There are several reasons, but in a word: Droid. First with the Motorola Droid (s mot) in late 2009 and now with the HTC Incredible Droid and new Motorola Droid X — both of which are sold out — Verizon no longer lags behind AT&T in terms of competitive handset offerings. Pairing powerful Google Android handsets with a solid 3G data network retains and adds customers: Verizon gained 665,000 postpaid subscribers, while postpaid churn was 0.94 percent. It likely didn’t hurt that Verizon increased its ETF fee to $350 last year either — fewer customers will defect when the barriers to do so become more costly.

Those Droid customers are data hungry, too. Verizon recently said Droid X customers are using five times the data that Verizon sees on other handsets. Given the large display, which I found great for browsing on my review unit, I’m not surprised the device is a data hog. With Droid X and the like hungry for data, Verizon says average data revenue per user is up 4 percent over the prior quarter and overall wireless data revenues increased 23.8 percent from a year ago. A closer look at Verizon’s numbers show a net loss, but the company took $2.3 billion in pre-tax charges associated with various divestment and workforce reduction activities.

We keep hearing constant rumors of a mythical Verizon iPhone and in a recent survey, a majority of Verizon customers indicated they would buy such a unicorn. But it’s safe to say that after three quarters of Android offerings, Verizon has found a way to survive and grow even without Apple’s coveted handset.

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