Verizon CFO talks iPhone: Free iPhone gains, incentivizing employees to sell lower subsidy devices & Share Everything plans

Jordan Kahn

verizon-iphoneVerizon CFO Fran Shammo spoke at the Duetsche Bank Annual Media, Internet & Telecom conference this morning, where he was asked a few questions related to the iPhone. Verizon reported its fourth quarter 2012 earnings last month with 9.8 million smartphone activations—a record 6.2 million of which were iPhone. We knew about half, or 3.1 million, of those iPhone sales were driven by the first full quarter with the iPhone 5, but today Shammo talked about just how important getting the free iPhone 4 was during the quarter:

But this past fourth quarter you had a couple — you had really one thing happen that never happened before, especially with Verizon Wireless, and that was for the first time ever, because of the iPhone 5 launch, we had the 4 at free. So it was the first time ever you could get a free iPhone on the

Verizon Wireless network. So that produced a lot of volume for us. We had a lot of new customers come into Verizon who took that free phone, and that was great for us because again if you think about — we sold a lot of LTE product in the fourth quarter. We sold a lot of 3G product from the iPhone products in the fourth quarter.

But that is key for us, because if you think about our two networks it is important for me as I migrate people into the 4G network I still have this very large 3G network that operates very efficiently. We are not investing any more capital in that network other than to keep it up and running, so no more coverage capital, no more capacity capital. If I can keep that network up and running that just generates more contribution margins for us. So it is critical for us to balance that. But, again, I think you had one point in time where you had a free phone, a free Apple phone that never happened before with us and that generated a lot of volume.

While noting that 53 percent of the carrier’s smartphone activations were iPhones in 2012, Shammo was asked about the opportunity to incentivize employees to sell non-Apple devices that would also come with lower subsidies for Verizon:

The answer is, no, we don’t and it is critical that we don’t do that. The reason for that is because what is more important for us is when a customer walks into a store that customer walks out with a phone that they will be happy with and not return under our 30-day guarantee. Because the worst thing that can happen for us is for me to incentivise a salesperson to get you into a phone that you walk out the door with thinking you are going to like and in three days you come back because you don’t like it. Therefore, now I’ve just subsidized two smartphones because that phone you used I can’t resell as a new phone.

You can read more from Shammo’s presentation and where he discusses the growth of Share Everything plans, tablets, and more here.

Liveblog: Apple’s Q1 2013 earnings results conference call

Jordan Kahn

As previously announced, today Apple is reporting its Q1 2013 earnings results. There is much uncertainty going into today’s call with Apple shares down significantly in recent months to roughly $500 since hitting a high of over $700 per share in September. With the iPhone 5 landing in a total of 100 countries last month, as well as iPad mini making its way to new markets, Wall Street estimates Apple will report between 47.5 million and 53 million iPhones sold and iPad sales between 23 million and 25 million. Compare that with Apple’s Q1 numbers last year: 37 million iPhones and 15.43 million iPads sold. Earlier this week Verizon reported 6.2M iPhone activations for the quarter, around half of which were iPhone 5 sales.

We’ll be providing blow-by-blow coverage of the earnings call in our live blog below at 2 PM Pacific/5 PM Eastern time. Stay tuned to 9to5Mac.com’s homepage for additional coverage:

Head below for updates… Read more

Verizon sold 3.1M iPhones in Q3, 21 percent were iPhone 5

Jake Smith

Verizon has reported its Q3 2012 earnings this morning with “a third consecutive quarter of double-digit percentage growth.” The nation’s second-largest carrier claims it experienced $29 billion in total operating revenue (3.9-percent gain over last year) and sold 6.8 million smartphones in total for the third quarter. Of the 6.8 million, Verizon reported selling 3.1 million iPhones. Just over one-fifth (or roughly 651,000) of those were the iPhone 5 that saw supply constraints. To compare, during Q2, Verizon sold 2.7 million iPhones.

The carrier also shed more light on its aggressive LTE rollout across the country. Its LTE service is now available to 250 million people in 419 markets across the United States. Furthermore, on the company’s earnings call, CFO Fran Shammo reiterated that its new Share Everything data plan has been “successful and well-received.”

You can find the press release below for specifics:  Read more

AT&T denies ‘vacation blackout’ rumors

Seth Weintraub

Reports emerged over the weekend about AT&T forcing its employees into a Sept. 21 to Sept. 30 “Vacation Blackout”.

According to an AT&T sales rep, AT&T staff has been given a vacation blackout from September 21 to September 30, just like Verizon employees. Our source also mentioned that blue carrier employees are undergoing training for an “iconic release.”

“Not true!” we’ve heard. We reached out to AT&T to see what it had to say regarding the above. An AT&T spokesperson told us this morning that there is no company-wide vacation blackout for the end of September.

We also talked to AT&T reps at other stores who implied more people are being put on duty, depending on staffing levels of that particular store, but there is no “blackout.” One New York employee will even sit out the first week of the iPhone launch due to a long-planned vacation.

TechCrunch sourced one rep from a single AT&T store, which may have its own little under-staffed blackout, but, as we heard, the policy is not nationwide.

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Verizon again tops J.D. Power and Associates Network Quality Performance report

Jordan Kahn

J.D. Power and Associates is out with the second half of its 2012 “U.S. Wireless Network Quality Performance Study”, and Verizon once again come out on top for network performance in five of the six regions included in the report. Only second to U.S. Cellular in the North Central region, Verizon posted the best overall network performance among the other carriers in the remaining regions based on 10 key problem areas that could impact the customer experience.

For a 16th consecutive reporting period, Verizon Wireless ranks highest in the Northeast region. Verizon Wireless achieves fewer customer-reported problems with dropped calls, initial connections, transmission failures and late text messages, compared with the regional average. Verizon Wireless also ranks highest in the Mid-Atlantic, Southeast, Southwest and West regions… U.S. Cellular ranks highest in the North Central region for a 14th consecutive reporting period. Compared with the regional average, U.S. Cellular has fewer customer-reported problems with dropped calls, failed initial connections, audio problems, failed voice mails and lost calls.

The study also covered the customer experience specifically for data-related problems. Not surprisingly, LTE device users experienced significantly less issues than older 3G devices like the iPhone:

The study finds that the number of data-related problems, especially those related to slow connection speeds, is significantly lower among customers using 4G LTE-enabled devices than among those using devices with older 3G/4G technology standards, such as WiMAX and HSPA+… For example, among customers with 4G LTE-enabled devices, the problem incidence for excessively slow mobile Web loading is 15 PP100, compared with the industry average of 20 PP100. Furthermore, the overall problem incidence for excessively slow mobile Web loading is even higher among customers with WiMAX and HSPA+ technology

Based on responses from over 26,000 U.S. wireless customers, the report explained how network performance was calculated:
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Verizon spanked by FCC for charging extra for tethering/apps, should drop extra fee in short order

9to5Mac

Verizon iPhone Personal Hotspot settings (Image: TechCrunch)

Verizon was fined a measly $1.25 million today for blocking access to tethering apps mostly on the Android platform. That does not apply to most iOS users (currently), however. That is because this ruling —for now— only affects LTE 4G devices. With the next-generation iPhone, which will launch in mid-September, heavily rumored to be the first iPhone to include LTE access, this will affect those choosing to go with Verizon Wireless for their fancy new iPhone.

The ruling asserts that Verizon must not charge an additional fee for tethering on its devices—so long as they are not on the grandfathered unlimited data plans. The iPhone has included tethering support since iOS 3.0, and the feature was taken to the next level by Apple and Verizon Wireless with the launch of the Verizon iPhone 4 and the wireless Personal Hotspot feature in early 2011. The feature was soon spread to iPhone carriers globally with iOS 4.3.

Earlier this year, Apple brought the Personal Hotspot feature to its tablet with the LTE iPad. Something notable with Apple and Verizon’s agreement for the iPad is that the wireless tethering feature is included in the pre-paid data plans. If a user pays a certain amount for data, they will not have to pay anything extra to access the wireless tethering system. With the LTE iPhone, according to today’s FCC ruling, users will have the same, great experience.

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