Verizon Wireless Scorched By iPhone?


Verizon Wireless — which passed up a chance to sell Apple’s iPhone (reportedly because Apple  wanted the world) — may have taken the hit that some expected in the quarter leading up to the gadget’s release. The Basking Ridge, N.J.-based wireless provider said Thursday that its retail subscriber base grew by 1.6 million net customers in the second quarter, which is down 11% from the year-ago period. Because Verizon’s arch-rival AT&T has exclusive rights to sell the iPhone, some observers predicted growth would stagnate while consumers waited to figure out whether they wanted to take the $500 plunge.  Based on the Q2 performance, this may be happening. (Next quarter’s figures will be more telling, of course: the iPhone didn’t go on sale until June 29.)

Moreover, Verizon Wireless’ overall subscriber growth (which includes Verizon’s network of wholesale customers that resell its service under their own brand names) fell 28% year-over-year to 1.3 million net new customers during the quarter. Verizon attributed most of the decline to bankrupt “virtual” carrier Amp’d Mobile, which runs on Verizon’s network and lost almost 200,000 customers. New iPhone customers have to be coming from somewhere, however, and Verizon’s wholesale business may also be absorbing some of the hit. The wholesale business lost 300,000 subscribers in the quarter, only two thirds of which came from Amp’d.

A Verizon spokesperson said the company had a “strong quarter,” but offered no further explanation of the year-over-year retail decline.  Verizon Wireless released these figures in conjunction with co-owner Vodafone’s quarterly results; majority owner Verizon Communications reports earnings July 30.  The report should help us learn more.

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