Verizon’s Gross Additions Increased by ~25.5% in 4Q14



Fierce competition among wireless telecommunication companies in 4Q14

In the previous part of this series, we learned that 4Q14 was marked by high promotional activity among wireless telecommunication companies. This trend was due to the high retail sales momentum in the holiday season coupled with the launch of Apple’s (AAPL) iPhone 6 just before the quarter in September 2014.

The four national US carriers—Verizon (VZ), AT&T (T), Sprint (S), and T-Mobile (TMUS)—launched a spate of promotions to acquire each other’s customers during the quarter. These promotional activities included incentives for customers—such as lower-priced data plans—and buyouts of customers’ contracts with other carriers. Some carriers even targeted customers of specific wireless carriers. For example, Sprint started its Cut your Bill in Half Event, specifically targeting customers of AT&T and Verizon. Please read Sprint’s Promotions Attracted New Customers in Fiscal 3Q14 to learn more.

Article continues below advertisement

Verizon attracted significant postpaid smartphone customers in 4Q14

Despite fierce competition among wireless telecommunication companies, Verizon attracted new customers during the quarter. Verizon’s gross additions increased by ~25.5% year-over-year. As you can see from the chart above, the majority of Verizon’s gross connection additions came from smartphones.

According to Verizon, smartphones and basic phones contributed to around ~61% of its gross additions during the quarter. Tablets also made a significant contribution to these gross additions. According to the company, Internet devices constituted ~37% of its gross additions during the quarter. These Internet devices were predominantly tablets.

If you want to take on diversified exposure to Verizon, you can invest in the Technology Select Sector SPDR Fund (XLK). The ETF held ~5% in the company on March 19, 2015.

You can also get more diversified exposure to the company by investing in the iShares Russell 1000 Growth ETF (IWF). This ETF held ~1.8% in the company on the same date.


More From Market Realist