Verizon's Q2 Revenues Boosted by Unlimited Data Plans, XO Acquisition

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Verizon, like carrier rival AT&T, is bouncing back on the wireless side, touting subscriber retention and new customers following its launch of unlimited data plans during the first quarter of the year. 

"As expected, the introduction of the unlimited pricing plan increased the LTE network usage as our customers enjoy the experience of consuming more data throughout the day on the industry-leading wireless network," Matt Ellis, Verizon's executive vice president and CFO said during the company's earnings call on Thursday.

Ellis told analysts that Verizon grew its postpaid account base for the first time in the last six quarters.

[Related: Verizon Beats Out AT&T In Battle Over Straight Path Communications, Will Pay $3.1B For Spectrum Holder]

Verizon added 633,000 wireless customers in Q2 2017, a 1.2 percent bump up from 585,000 in the year ago quarter, proving that its unlimited data plans are paying off. The carrier's retail postpaid churn rate was 0.94 percent during the quarter, lower than Wall Street's expectation of 1.08 percent.

Following suit with wireless rivals Sprint and T-Mobile, Verizon began offering unlimited data plans during Q1 2017. The second quarter marks the first full three-month period that Verizon offered unlimited plans.

Despite subscriber wins in Q2 however, total wireless revenue slumped by 1.9 percent to $21.28 billion compared to $21.70 billion in the year-ago quarter. The carrier attributed the decline to lost overage revenue but said it is mitigating the lost revenue as some customers create new accounts or move to unlimited plans. 

The Basking Ridge, N.J.-based carrier touted its recent third-party network performance survey standings during its earnings call, including its freshly-crowned 4G network leadership position by J.D. Power.  Verizon also highlighted its completed Yahoo acquisition, which will help the carrier scale our media business, as well as its winning bid for Straight Path Communications for $3.1 billion, which Verizon expects to close during Q1 2018.

"Our spectrum portfolio positions us to lead and further drive 5G technology and its ecosystem," Ellis said of the Straight Path win. 

Verizon's wireline division, which includes its Enterprise Solutions, Partner Solutions, Business Markets segments, and its recently-acquired XO Communications operations, climbed 1.2 percent to $7.80 billion in Q2 2017, compared to $7.71 billion a year ago.

"This shift in the wireline revenue trend towards fiber is growing," Ellis said, noting that revenues for fiber-based products grew more than 3 percent during the quarter. "[This] supports our plans to further invest in fiber and our emphasis on delivering value to all business customers, from the very small to the large enterprise," he said.

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