Verizon wireless closes gap with Cingular

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Verizon, the second-largest US telecommunications group, said fourth-quarter profit had fallen to $1bn, or 35 cents per share, from $1.7bn, or 59 cents per share, a year ago.

Verizon’s fourth-quarter revenue rose 26 per cent to $22.6bn. The results include charges for taxes related to the sale of its Dominican Republic operations and for costs related to the spin-off of its directories publishing business.

Net income before these and other special items was $1.81bn, or 62 cents a share, compared with $1.78bn, or 64 cents a share, including discontinued operations.

The results reflect the shift in Verizon’s business as it focuses on growth opportunities including wireless telephony, broadband and its nascent fibre-based advanced video and TV operations. The shift is intended to offset the continued decline in traditional residential voice services.

Verizon Wireless, a joint venture between Verizon and Britain’s Vodafone Group, added 2.3m net customers in the fourth quarter, bringing its nationwide total to 59.1m and closing the gap with Cingular Wireless which ended the year with 61m subscribers.

Churn, a key measure of customer loyalty, fell to 1.14 per cent in the fourth
quarter from 1.24 per cent in the previous period.

In an effort to fend off competition from cable companies, Verizon is also expanding its FiOS service, which offers video and high-speed internet over fibre-optic wire. Verizon said it had 207,000 FiOS TV customers at the end of the year, with the service ready for sale to 2.4m homes.

The company had 7m total high-speed internet connections at the end of 2006, up 36 per cent from a year ago.

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