Thursday, February 5, 2015

Verizon Sale of Fixed Assets Could Boost Mobile Revenue to Nearly 75% of Total

If Verizon acquires $10 billion worth of assets from Verizon Communications, and the value of a subscriber is about $3000, that implies the purchase of about 3.3 million subscribers. At $3200 per subscriber, the deal implies the purchase of about 3.13 million subscribers.

Precisely how many fixed network subscribers Verizon presently has is a bit of an estimate, since “revenue generating units” tends to be the new metric, in a triple-play market.

But assume total high speed access subscribers are in the range of 9.2 million units, and that high speed access is about 50 percent of total fixed network active household accounts. That implies 18.4 million homes provided with at least one service.

So a sale of perhaps 3.13 million subscribers might reduce Verizon Communications fixed network accounts by about 17 percent.

In any event, Verizon soon will be generating even more of its revenue directly from mobile services, not fixed services. In the past, Verizon has generated 69 percent of revenue from its mobile segment. Selling 17 percent of its fixed network subscriber base will boost mobile even further. As a rough approximation, the sale of fixed assets might boost mobile segment revenues to about 74 percent of total.

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