Verizon posts Q4 profit of $7.9B, adds 1.7M net connections
Verizon swung to a fourth-quarter profit as it continued to add wireless customers at a healthy clip. — The New York company on Tuesday posted a net income of $7.9 billion, or $1.77 a share, compared with a year-earlier loss of $1.9 billion, or $1.48 a share.
Context & Ripple Effects
Verizon enters 2014 after a court victory over the FCC's net-neutrality rules, including permission to charge for faster delivery of online content, and with an agreement to acquire Intel Media's over-the-top TV assets. The quarter's return to profitability and connection growth give those network- and video-service moves a stronger commercial base.
First-order effects
- Verizon reverses its year-earlier quarterly loss while adding 1.7 million net connections, expanding the customer base over which it can sell wireless and related services.
- Intel Media's over-the-top TV assets move into a Verizon strategy backed by a profitable wireless business rather than a standalone startup effort.
Second-order effects
- The FCC ruling makes Verizon's growing network base more valuable to online-content providers that may seek faster delivery, sharpening the commercial stakes of network access.
- Verizon's combination of wireless scale and acquired video assets puts pressure on other carriers to pair connectivity with consumer services rather than compete only on subscriptions.
Third-order effects
- If carriers can monetize both subscriber relationships and differentiated network delivery, competition may shift toward vertically integrated network-and-media offerings, with net-neutrality policy shaping the limits of that model.
The trend: US carriers are seeking growth beyond connectivity by combining subscriber scale, network-control economics, and internet-delivered media services.