AT&T and Verizon Q3 financials show just how little there is to choose between them

The two major US telcos both reported their Q3 financials this week, and both show steady, if unspectacular, performance. AT&T posted revenues up 2.5 per cent year-on-year to $33.0bn, whereas Verizon posted revenues up 4.3 per cent to $31.6bn. AT&T’s net income was $3.0bn and Verizon came in at $3.8bn. They continue to operate neck and neck.

Each company uses different terminology and it’s next to impossible to match like for like, but there are some comparisons we can make. Taking wireless first:

• Verizon recorded 106.2m retail connections, up 4.9 per cent, whereas AT&T recorded 118.6m subscribers and connections, up 8 per cent
• Of these, less than six per cent were prepaid for Verizon, with nine per cent prepaid for AT&T
• Verizon had 1.5m net adds, AT&T 2.0m net adds
• Verizon recorded 35.4m retail postpaid accounts, with 2.8 connections per account, suggesting it had 99.1m connections; AT&T recorded 75.1m postpaid subscribers and connections
• Postpaid ARPA for Verizon was $161, and with 2.8 connections per account this suggests that ARPU was $58; AT&T said its postpaid ARPU was $65
• Verizon recorded a 1.29 per cent churn rate, and AT&T saw a 1.36 per cent churn.

In other selected data, Verizon said that 91 per cent of its postpaid user had smartphones, and AT&T recorded 18.5m connected devices.

Moving on to the telcos’ wireline businesses:

• Verizon’s wireline business reported revenues down 0.8 per cent at $9.6bn, and AT&T reported a 0.4 per cent fall to $14.6bn
• Verizon’s wireline revenues represented 30 per cent of its overall income, whereas AT&T’s wireline business was worth 44 per cent
• Verizon had 20m wireline voice connections with 9.1m broadband connections, whilst AT&T had 26.2m wireline voice connections with 16.5m broadband connections
• Verizon reported 16.5m digital FiOS fibre connections, up 8.8 per cent year-on-year; AT&T reported 6.1m U-verse fibre video connections, up 15.2 per cent

For AT&T, $5.7bn of its wireline revenues come from the consumer segment, with an additional $8.7bn from Business Services. Broken down another way, it receives $8.9bn from data services and $4.5bn from voice.

So what did their respective leaders think of the results?

“We see continued, healthy customer demand for wireless and broadband services, and we are encouraged by the growth we are starting to see in the areas of video delivery and M2M,” said Lowell McAdam, chairman and CEO of Verizon. “Our cash generation remains strong, and last month we were pleased to announce board approval of a quarterly dividend increase for the eighth consecutive year.”

“Our strategy is on track and our investments in giving customers best-in-class service to access content everywhere and on any screen continue to pay off,” said Randall Stephenson, chairman and CEO of AT&T. “We had strong subscriber growth in wireless and U-verse, and our strategic business services revenues continued to post double-digit growth.”

Two pretty much interchangeable comments, illustrating that there is precious little separating the two dominant US telcos.