Adoption of Verizon’s device plan in 4Q15
In the previous part of this series, we saw that Verizon’s (VZ) wireless revenue increased marginally in 4Q15. It increased ~1.2% YoY (year-over-year) to reach ~$23.7 billion. We also saw the declining trend in the segment’s wireless service revenue and the growth of its equipment revenue. An increasing adoption of Verizon’s device plan is impacting both these revenue streams. It’s affecting the telecom’s wireless service revenue negatively and giving a positive boost to the component’s equipment revenue.
During 4Q15, the adoption of the device plans increased sequentially. But the figure was lower than the company had anticipated. Phone activations on Verizon’s installment plan were ~67% during 4Q15. The company had expected this metric to be around 70% for the quarter.
As we can see in the above graph, the YoY growth in this metric was significant during the quarter. Earlier in 4Q14, this figure was at ~25%. The 4Q15 figure for these phone activations was also higher compared to 3Q15.
Penetration of Verizon’s installment plan
In terms of Verizon’s total wireless postpaid phone component, installment plan subscribers represented ~29% at the end of 4Q15. In 3Q15, this figure was ~22%.
According to the company, there were ~25 million postpaid phone customers on the installment plan at the end of 4Q15. The company witnessed ~7.6 million phone activations on the installment plans during the quarter.