How Long Will Verizon Be a Phone Company?

Telecom giant Verizon Communications is reporting year-over-year double-digit percentage growth on both operating income and earnings per share for the third consecutive quarter. But with most of that growth coming from outside the traditional phone service, will the company soon have to stop marketing itself as a traditional telecom provider?

VerizonEUs third quarter 2013 results clearly reveal high customer demand for wireless phone subscriptions, as well as FiOS and strategic enterprise services. In fact, the FiOS services are whatEUs driving continued strength in the companyEUs wireline revenue.

EUOur unwavering focus on wireless, FiOS and strategic enterprise services has produced consistent performance, and weEUve delivered double-digit earnings growth in six of the past seven quarters,EU said Lowell McAdam, Verizon chairman and CEO. EUVerizonEUs strategic networks form a powerful distribution platform for future growth and innovation.EU

Anything But Wireline-Driven

Again, the companyEUs future looks anything but wireline-driven. In September, it inked a deal to acquire Vodafone's 45 percent stake in Verizon Wireless for $130 billion. The transaction is expected to close in the first quarter of 2014.

When the ink dries, Verizon will own 100 percent of the largest wireless carrier in the United States. The company said the wireless division will be better equipped to leverage changing competitive dynamics in the market and capitalize on the evolution of consumer demand for wireless, video and broadband services. That should drive up wireless revenues even more.

As it stands, total revenues on the wireless side were $20.4 billion in the third quarter. ThatEUs up 7.2 percent year-over-year. Service revenues in the quarter totaled $17.5 billion, up 8.4 percent year over year. Retail service revenues grew 8 percent year over year, to $16.8 billion. Verizon Wireless added 1.1 million net retail connections, including 927,000 retail postpaid net connections, in the third quarter.

By contrast, consumer revenues on the wireline side...

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