Verizon Communications and AT&T arguably took bigger hits to their enterprise than consumer segments as a result of the recession, second quarter financial results suggest.
Revenue from Verizon’s global enterprise business dropped 6.7 percent while the wireless customer segment revenue grew 27.7 percent. Even consumer wired services revenue grew 13.7 percent in the second quarter.
AT&T also reported that the deepest economic impacts in the second quarter came in the business services segment.
AT&T CFO Richard Lindner likewise says total business revenues, including enterprise, wholesale, small and mid-sized customers, were down 5.6 percent year over year. Excluding equipment sales, business revenues were down 4.3 percent, Lindner says.
Wireless revenue was up 10.1 percent, on the other hand, while total wireline consumer customer revenues were $5.4 billion in the second quarter, compared with $5.7 billion in the year-earlier quarter and essentially flat, down only $11 million, versus the first quarter of 2009.
"We’ve seen pressures across business product lines but the largest impacts are volume related in traditional voice and legacy data products," says Lindner. "The sectors where we’ve seen the most impact, as you would expect, are in finance, transportation, and manufacturing."
Consumer broadband and video are helping both AT&T and Verizon, while it appears legacy business products are suffering. Newer services including Ethernet, VPNs, hosting, IP conferencing and applications services grew 15.2 percent year over year.
In an economy where consumer spending drives roughly 75 percent of activity, one might have suspected consumer revenue would be harder hit. Instead, it appears massive job losses have crimped business segment spending the most.
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