A Foolish Week of Telecom
According to Verizon Communications' (NYS: VZ) second-quarter earnings, the lowest churn in four years and strong customer additions for Verizon Wireless, the company's joint venture with Vodafone (NYS: VOD) , boosted Verizon's consolidated Q2 net income by 18.9% over the same period last year.
Ironically, having fewer people upgrade their handsets contributed to Verizon's higher margins. The high subsidies that carriers must pay to offer high-end smartphones at competitive prices cuts into profits. Verizon CFO Fran Shammo told Dow Jones Newswires that customers may be putting off upgrading until new devices are launched in the fourth quarter.
Verizon Wireless drives the company's revenue growth, contributing 65% of Verizon's total sales. Wireline growth, however, was somewhat disappointing. The company said its FiOS growth was not as high as expected, but it hopes to raise wireline margins by upping FiOS prices and charging customers for higher-speed tiers.
And another one rides the bus
Sprint Nextel (NYS: S) held the official launch of its 4G network last Sunday, joining the ranks of AT&T (NYS: T) and Verizon as the third major U.S. carrier to have such a network. The service was launched in the major metropolitan areas of Atlanta, Dallas-Fort Worth, Houston, San Antonio, and Kansas City (both Kansas and Missouri), as well as in several smaller markets.
Share and share alike
AT&T is following in Verizon's footsteps in offering plans that allow for the sharing of wireless data among two or more devices. Verizon started its shared offerings last month. AT&T's will start next month.
A major difference in the plans is that Verizon, unlike AT&T, requires its new wireless customers to sign up for a shared data plan. Another one is the pricing as more devices are added to the plans. Verizon's price will go up in a straight line as equipment is added. AT&T's pricing will become cheaper for each device added.
I was disappointed when I found that Verizon's shared data plans would actually increase my family's already sizeable monthly wireless bill. Getting some competition from AT&T in this arena is a welcome sight. I now await a shared plan from Sprint.
More losses for the Finns
Nokia (NYS: NOK) also released its second-quarter earnings this week, and they weren't pretty. Its net loss of $1.71 billion for the quarter far eclipsed its $448 million loss in Q2 last year. Much of this was from the inability of its newly launched Lumia line of smartphones to make up for losses in its feature-phone business.
A bit of a happy note may have sounded, though, with sales of Lumia smartphones being higher than expected. Bloomberg reported that Nokia sold 4 million Lumias worldwide, exceeding analysts' estimates of 3.8 million units sold.
If a half-price Nokia Lumia 900 LTE smartphone could persuade you to buy into the Windows Phone OS ecosystem, then head on over to the nearest AT&T store and pick one up for $49.95. One thing to be aware of, however, is that the Lumia 900 cannot be upgraded to Microsoft's upcoming Windows Phone 8 release.
The country formerly known as Burma wants to talk
Just when you thought there are no more wide-open opportunities in telecom, along comes this potential blockbuster. The government of Myanmar, that closeted Southeast Asian country, would like to create up to three new telecom joint ventures with foreign companies. The Myanmar government would own at least a 51% share of any joint ventures.
Myanmar has a population of around 55 million, with only 3 million or so having any kind of phone connection. Estimates are that around 550,000 have mobile phones.
Will the real "America's Largest 4G Network" please stand up
T-Mobile USA has certainly been pushing the envelope over the past 18 months with its claim of being "America's Largest 4G Network." Whether or not T-Mobile's HSPA+ network qualifies as being 4G, that network's coverage of 215 million people, as FierceWireless has pointed out, is less than AT&T's claimed 4G coverage of 250 million people. AT&T's coverage, by the way, includes both HSPA+ and LTE technologies.
Meanwhile, Verizon Wireless claims on its website that it has "America's fastest 4G network," with "more 4G LTE coverage than all other networks combined."
A T-Mobile spokeswoman told FierceWireless that the company doesn't "care to debate these last few POPs, and the numbers are constantly changing." The company has, however, dropped that "America's Largest" claim.
That has been replaced with new claims on its website about its 4G network: "It's faster than AT&T's nationwide 4G network. It's faster than Sprint's 4G network. And more people use it than Verizon's 4G network. Period."
Keep up with the trends in telecom: Check out The Motley Fool's report on the next trillion-dollar revolution. It details a "hidden" component play inside mobile phones that is also a leader in the exploding Chinese market. Hundreds of thousands have requested access to previous reports. You can access this one now -- it's free. Or if you'd like something more company-specific, our senior technology analyst details in our new premium research report why Applestill looks like a buy.
The article A Foolish Week of Telecom originally appeared on Fool.com.Fool contributorDan Radovskyowns shares of AT&T and Nokia. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and Vodafone Group and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.