The wireless operating margin was flat year-on-year at 35.0 percent, and the EBITDA margin fell by 0.1 percent point to 44.8 percent. Verizon Wireless added 565,000 retail postpaid customers in the three months, while losing 188,000 prepaid users. Total retail connections were up 5.1 percent year-on-year to 102.6 million. Retail postpaid churn was at 1.03 percent in the quarter, down from 1.07 percent a year ago.
Verizon added 621,000 4G smartphones to its network in the quarter, as well as 820,000 4G tablets. Nearly 80 percent of its postpaid customers were using smartphones at the end of March, and around 70 percent of new postpaid customers are taking 4G devices. The operator said the LTE network handled 86 percent of its mobile data traffic in Q1. On its More Everything accounts, average data usage was up 54 percent year-on-year.
In the fixed market, Verizon reported revenues down 2.0 percent to USD 9.5 billion. Global Enterprise revenues fell 6.0 percent to USD 3.3 billion, while consumer retail sales were up 4.0 percent to USD 4.0 billion. The operating margin in wireline improved to 4.3 percent from 1.5 percent a year ago.
Consumer growth came mainly from Fios services, which increased revenues 10.2 percent to USD 3.4 billion. Fios internet subscribers increased by 133,000 compared to the end of 2014 to 6.7 million, and Fios Video customers were up by 90,000 in the same period to 5.7 million. DSL customers were down by 12.7 percent year-on-year to 2.5 million. Verizon migrated 47,000 customers from copper to Fios in the quarter, in line with its full-year goal of 200,000 migrations.
At the bottom line, Verizon reported earnings of USD 1.02 per share, down from USD 1.15 a year ago when it booked one-time gains on its buy-out of Verizon Wireless. Excluding these items, EPS was USD 0.84 a year ago. EPS in the latest quarter was held by reduced depreciation on the wireline assets held for sale to Frontier; this added 2 cents in Q1 and will add 3 cents per quarter until the sale to Frontier is completed in H1 2016.
Group revenues were up 3.8 percent to USD 32.0 billion in Q1 and rose 4.2 percent after excluding divested operations. Operating profit increased 11.2 percent to USD 8.0 billion, and the EBITDA margin improved to 37.4 percent from 36.7 a year ago.
Operating cash flow jumped to USD 10.2 billion from USD 7.1 billion in Q1 2014, thanks to a one-time gain of USD 2.4 billion from monetising tower assets. Excluding the towers deal, free cash flow (operating cash flow less capital expenditures) totaled about USD 4.2 billion, up from USD 3.0 billion in Q1 2014. Verizon said it still expects full-year 2015 capex of USD 17.5-18.0 billion.
