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:

  • Tom M: 5/1 in SE Austin for free will be a godsend to the low income households in that area. People in Austin (me included) are very happy TWC is finally ge...
  • Oscar@SA: Come over to San Antonio, we have bacon!! \o/...
  • The Kin: I would gladly pay $70 for G.fiber. My DSL here in KY is only a 1.5 down and I pay 67 a month for it. With some of the bills I've seen when working fo...
  • fjfdybvfgj: Don't know how ATTs service can be considered competitive knowing that it has a data cap and that you won't ever see the gigabit speed. Hell even thou...
  • Austintx: Yay! we'll be able to order next month... But, no telling when installation will be. One thing still needs to be said, though; 5/5 (or 5/1-ugh!)Mbp...
  • fjfdybvfgj: Its a good thing that the merger will never be accepted as its heavily against the public interest and no politician would want to commit political su...
  • fjfdybvfgj: I remember when I lived in Maryland and Comcast tried to say that nothing over 10mbps existed and that it was top of the line for $150/month. I moved ...
  • ROGER: I manage my father and my accounts for Uverse and recently was informed our fully loaded rates (includes all taxes and rentals) for u300 and Max inter...
  • BobInIllinois: This is really funny! In our area, back in 2008 when Comcast took over from Insight cable a few years back, Comcast started closing their service...
  • Jen: John did your service ever get better? Mine just started throttling about a month ago and they are telling me the tower that worked best for me is off...
  • Mike Queen: Where do I sign up? I'm in Lewis County. I complain, they offer to disconnect me. I need the Internet to work as well. I've paid for high speed for...
  • Ginny: Frank Sinatra is dead....

Your Account: