Home » Competition »Consumer News »Editorial & Site News »History »Public Policy & Gov't »Rural Broadband »Verizon »Wireless Broadband » Currently Reading:

Wireless is Verizon’s Cash Cow: $12.9 Billion in Operating Profits vs. Landlines/FiOS: $87 Million

moneyIf “follow the money” is a maxim in business, then it should come as no surprise Verizon favors the making the bulk of its investments and expansion in its enormously profitable wireless business.

Verizon Wireless earned the company $12.9 billion in operating profits during the first six months of 2013 while landlines and Verizon’s fiber optic network only delivered $87 million. That inconsistency may help explain why Verizon FiOS expansion is stalled while Verizon throws enormous sums into its 4G LTE wireless upgrade project.

The average Verizon Wireless bill is now over $150 a month. FiOS customers pay an average of over $150 a month as well, but Verizon’s costs to reach its smaller customer footprint are higher. Revenues for basic landline service are considerably lower than either wireless or fiber service.

With wireless providing a virtual ATM for Verizon Communications, the New York Times notes it is unsurprising that Verizon wants to buy out its European partner Vodafone, which owns 45% of Verizon Wireless. Once the $130 billion transaction is complete, Verizon will keep wireless profits all to itself as it continues lobbying for permission to decommission rural landlines and encourage those customers to use its vastly more profitable and almost entirely unregulated wireless network instead.

Exactly 100 years after Verizon predecessor AT&T/The Bell System voluntarily agreed to be a regulated monopoly provider of telephone service, Verizon Wireless and AT&T have successfully established unregulated wireless networks that serve most Americans with cell service and wireless data at prices that would be shocking to people 20 years ago.

Currently there is 1 comment on this Article:

  1. txpatriot says:

    It’s funny. For years, consumer advocates suspected (with zero evidence) and in some cases actually claimed that regulated monopolies like VZ were subsidizing their unregulated businesses with profits from their regulated businesses.

    So the FCC and the various state commissions came up with arcane rules about reg/unreg cost separations, intercompany transactions, etc. All to protect the supposed “cash cow” of the regulated side (and its captive customers) from being plundered to support the unregulated (and riskier) operations.

    NOW it’s the unreg side making money hand over fist, and consumer advocates are complaining about THAT! How times have changed!

Search This Site:

Contributions:

Recent Comments:

  • Greg Noblin: My family has an iMac, I use a 5K iMac for my business, we have two girls, 4 iPhones, 2 iPod touches, and 4 iPads and an Apple TV. Today is July 4,...
  • BobInIllinois: Never underestimate the ability of Chicago politicians to keep finding more things to tax, while continuing to increase tax rates on all of the exist...
  • Matt: In Hawaii, meaning there is no real competition. Had the (15/1) plan, and the Standard HD TV all after taxes $142. They were also charging me for the...
  • dawsonfiberhood: Uh, the culprit has been committing dozens of acts, across many states, and nearly simultaneously in widely separated areas. The culprit has been exca...
  • Roy: I'm a Dish subscriber. As best as I could tell, your Dish page covered only corporate issues. Do you have a page that discusses how to score deals f...
  • Phillip Dampier: We have plenty of DoT fiber around here that is black on the pole but is orange running down the pole or at the point it descends underground or into ...
  • Aaron: Outdoor fiber cable doesn't have bright orange insulation. Every buried or aerial fiber I've ever encountered was black, with a thick outer sheath, s...
  • James R Curry: I filed an FCC Open Internet complaint about the 600kbps video throttling back on June 19th. This morning, I received a call from Sprint's executiv...
  • Limboaz: I'd sooner have a root canal without freezing than watch most of the worthless content on Showtime. They put the weird in Hollyweird....
  • BobInIllinois: dancer....Verizon sez that their sold-to-Frontier FiOS fiber assets are spread throughout the US(true), while the wirelines have 2 disadvantages: 1)d...
  • dancer: Why Verizon wants to keep selling off more FiOS assets to Frontier and forces Frontier to buy Wireline Assets?...
  • Lee: A website is not effective at selling more services than you originally wanted. The helpful (sarcasm) service reps at Frontier always try to get you t...

Your Account: