Editor in Chief
- Dec 30, 2010
- Reaction score
- Austin, TX
While some of us might appreciate Verizon's new Smart Rewards program, we shouldn't let that fool us into thinking Big Red is our new BFF. A new financial report was just released at the same time as Verizon's quarterly earnings have been reported and the results prove that the company is brutally efficient at min-maxing what they get from costumers.
First we have their financials statement. Their second quarter profits soared almost doubling from last year at the same time. They posted profits of $4.21 billion and $1.01 earnings per share, up from $2.25 billion and 78 cents per share in second quarter 2013. On top of this, Verizon's overall revenue was the highest recorded in over six quarters at $31.48 billion. They now have a 75 percent smartphone consumer base, up from 72 percent last year.
Now comes the report from Consumer Intelligence Research Partners. They performed an analysis meant to determine which carrier makes the most profit from moving subscribers off of unlimited data and then charging them for data overages. Verizon leads the pack by a large margin in profiting from these data overages.
Here's a quote with more of the details,
The firm found that among customers with data plans, Verizon has the fewest proportion of subscribers on unlimited plans at 22%. AT&T is the No. 2 carrier at 44%. The study found that Verizon also has the highest portion of customers on shared data plans.
As one might assume, Verizon’s success with higher-margin data plans ultimately means that the carrier also enjoys the highest average monthly bill, with 51% of Verizon customers reporting that they pay more than $100 each month compared to an average of 42% at other carriers.
14% of subscribers say they pay more than $200, according to the study, compared to an average of 7% across other carriers.
To be clear, this article is not meant to demonize Verizon. Most large companies exist to make the maximum profit they can and return share-holder value. Verizon is amazingly successful at doing this. We applaud them for doing what it is in their nature to do.
Of course, as consumers, we must remain vigilant to the realization that Verizon's purpose is to squeeze every red penny they can from their customers in order to remain on top. That's just the name of the game.