Verizon’s Wireline Revenue: Falling Trend Continued in 2Q15



Verizon’s wireline revenue

Earlier in this series, we focused on the performance of Verizon’s (VZ) wireless segment in 2Q15. Now, we’ll look at the telecom company’s wireline segment. Wireline is a significant segment for Verizon. Previously, we mentioned that Verizon’s wireline operations are the second largest in the US. It’s after AT&T’s (T) wireline segment. The segment has a much lower contribution than the wireless segment. Verizon’s wireless revenue was ~$22.6 billion compared to wireline revenue of ~$9.4 billion during 2Q15. Verizon’s wireline revenue continued its falling trend in 2Q15. It fell ~2.20% YoY (year-over-year).

Verizon’s wireline revenue is still negatively impacted by shrinking legacy services including voice and data. Other wireline telecom companies like AT&T, CenturyLink (CTL), and Windstream (WIN) also face this trend.

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Shrinking enterprise segment impacts wireline

The YoY fall in Verizon’s wireline revenue came largely from the enterprise subsegment in 2Q15. The three largest subsegments in the wireline division are Global Enterprise, Global Wholesale, and Mass Markets—predominantly consumer.

Verizon’s wireline revenue from enterprise fell by a significant ~6.40% YoY to ~$3.2 billion. The wireline revenue from wholesale fell by ~4.50% YoY to ~$1.5 billion in 2Q15. Both of these subsegments are being negatively impacted by shrinking revenue from legacy services, as we mentioned earlier.

However, Verizon’s consumer wireline revenue rose modestly by ~4.50% YoY to ~$4 billion in 2Q15. We’ll look at the segment’s key growth driver in the next part of this series.

You can get diversified exposure to Verizon by investing in the iShares Core S&P 500 ETF (IVV). IVV held ~1% in Verizon on July 31, 2015. You can also consider the SPDR Dow Jones Industrial Average ETF (DIA). DIA held ~1.80% in the telecom company at the end of July.


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