Cellco Partnership is the #1 US wireless phone operator in terms of sales and subscribers (ahead of top rival AT&T Mobility). Serving nearly 110 million consumer, business, and government customers nationwide under the Verizon Wireless brand, the joint venture is controlled with a 55% stake by Verizon Communications; UK-based global communications giant Vodafone owns the remainder. Offering both standard post-paid (about 95% of its customers) and prepaid subscriptions, it distributes phones from manufacturers including Samsung Electronics, Research in Motion, LG, and Apple. The company also offers mobile data services, including text messaging, multimedia content (V CAST), and Web access.
Formerly a provider of only wireline communications services, parent Verizon Communications continues to build its wireless business through acquisitions as it advances further toward its goal of becoming a more robust telecom services company. The growing wireless business is central to its aspirations and now accounts for more than 60% of Verizon's total revenue.
Verizon Wireless' 2011 revenue increase of 10% was driven by both service and equipment sales. Equipment revenue increased more than 40% for the year as new and upgrading customers chose smartphones instead of basic, feature phones. The proliferation of the more-capable smartphones also drove data services revenue, which grew from 35% of total service revenue in 2010 to 40% in 2011. Those gains offset a drop in voice revenue. Data services were a third of overall Verizon Wireless revenue for the year. Service revenue, which is primarily retail, also benefitted from a gain in total customers, helped out by a less than 1% churn rate in its postpaid retail customer base, about 80% of its total connections.
In 2012 the company introduced a residential wireless broadband service, called HomeFusion Broadband, powered by its 4G LTE network. It was initially launched in Dallas; Nashville, Tennessee; and Birmingham, Alabama.
Verizon Wireless bolstered its competitiveness in handset choices in 2011 when it began offering Apple's iPhone, the world's most popular smartphone, sporting the second-most popular operating system, iOS, after Google's Android platform. To support the growth of its mobile services, Verizon was the pioneer among major US carriers in implementing the advanced 4G LTE (long-term evolution) technology. It has LTE deployed in about 200 of its markets, covering about 200 million people, and plans to have essentially all of the remaining 3G networks upgraded by 2013. Not only does Verizon Wireless expect to deliver faster speeds to customers through LTE, but it also expects the upgrade will improve its margins through reduced operating costs.
In another move to solidify its services capabilities, the company agreed in 2011, in two separate deals, to buy spectrum licenses from Cox Communications and SpectrumCo, a joint venture of the other leading US cable operators, Comcast, Time Warner Cable, and Bright House Networks. The combined deals cover nearly 290 million points of presence for nearly $4 billion. As part of the agreements, each of the parties will have certain rights or options to sell each others' products and services. It will also involve an ongoing collaboration to develop and offer a "quadruple play" of wireless, voice, video, and Internet services and products. Should these deals gain approval, Verizon Wireless announced plans in 2012 to shed certain of its own spectrum licenses to consolidate its network around the acquired licenses and its own existing LTE network. The deals, however, are facing opposition from many of the same critics of AT&T's ultimately-failed attempt to buy T-Mobile USA.
Among Verizon Wireless' other retail partnerships is a deal struck in 2011 that made wireline telecom services provider CenturyLink an authorized reseller of Verizon Wireless phones and service.
Verizon Wireless formed a joint venture in 2010 with AT&T and T-Mobile USA that will build a nationwide mobile wallet network known as ISIS to enable wireless customers to make electronic retail purchases using their cell phones. The system is planned for introduction in some US markets in 2012.
Verizon Wireless became the leading US mobile carrier in 2009 with the $30 billion purchase of Alltel, adding about 13 million subscribers. In order to gain approval for the acquisition, Verizon had to exit about 100 US markets through the divestiture of assets located mainly in rural areas where Alltel had overlapping operations. As part of this restructuring, AT&T paid about $2.4 billion for rural assets in 18 states, taking on about 1.6 million new subscribers as part of the deal. In a similar transaction, Verizon Wireless sold assets in six states to Atlantic Tele-Network for about $200 million.
Verizon Wireless began operations in 2000 when a former Baby Bell, Bell Atlantic, and Vodafone combined their US wireless assets. The company gained GTE's US wireless operations when Bell Atlantic bought GTE to form Verizon Communications that year.