Verizon sees no slowdown

Also like AT&T, Verizon is experiencing substantial cash flow -- $26.3 billion from continuing operations, a 14% increase -- to the extent that it increased its dividend by 6.2% and repurchased $2.8 billion shares. Those activities will continue, Toben said. The company decreased its capital expenses as a percentage of its revenue from 19.4% to 18.8% and will see further declines in 2008.

Verizon Wireless added 2 million net customers in the fourth quarter, including 1.9 million retail net adds, to hit 65.7 million total customers, and lowered its churn rate to 1.2% in the fourth quarter, better than its third-quarter mark of 1.27% but slightly above the fourth quarter of 2006 (1.14%). For the year, Verizon Wireless added 6.7 million net customers.

Wireless revenue was up 15.9% for the year, driven by a 65% increase in data revenue.

Verizon added 1.5 million FiOS Internet customers and 943,000 FiOS TV customers in 2007, penetration rates of 21% and 16%, respectively. Its consumer sales are centered increasingly on selling a bundle, and that is helping the company retain wireline customers where it sells FiOS, Toben said. Residential line loss for the fourth quarter was 616,000 lines, better than the third quarter of 2007 (664,000) but up slightly from a year ago.

More importantly, consumer revenue growth was up as Verizon boosted its average revenue per user by 11% over 2006 to $59.48.

Verizon Business revenue grew slightly (1.8%), and the company actually saw a drop-off in the fourth quarter, as some large customers, including a large cable customer, left the fold.

“Our enterprise sales momentum is continuing to be very strong,” said Dennis Strigl, president and chief operating officer. “What occurred in the fourth quarter was annoying. We did not offset the take-back fast enough. But the lower growth number shouldn’t be interpreted as a shift. All the traffic from these few major customers that we lost will be gone within the first half of the year. We expect revenue to be back.”