Operating results
2008 financial year compared to the 2007 financial year
Verizon Wireless
| 2008 | 2007 | % change | |||
|---|---|---|---|---|---|
| £m | £m | £ | $ | ||
| Revenue | 10,144 | 9,387 | 8.1 | 14.5 | |
| Service revenue | 9,246 | 8,507 | 8.7 | 15.2 | |
| EBITDA | 3,930 | 3,614 | 8.7 | 15.3 | |
| Interest | (102) | (179) | (43.0) | ||
| Tax(1) | (166) | (125) | 32.8 | ||
| Minority interest | (56) | (61) | (8.2) | ||
| Group’s share of result in Verizon Wireless | 2,447 | 2,077 | 17.8 | 24.8 | |
Note:
- (1)
- The Group’s share of the tax attributable to Verizon Wireless relates only to the corporate entities held by the Verizon Wireless partnership and certain state taxes which are levied on the partnership.
Verizon Wireless increased its closing customer base by 10.6% in the year ended 31 March 2008, adding 6.5 million net additions to reach a total customer base of 67.2 million. The performance was particularly robust in the higher value contract segment and was achieved in a market where the estimated mobile penetration reached 88% at 31 March 2008.
The strong customer growth was achieved through a combination of higher gross additions and Verizon Wireless’ strong customer loyalty, with the latter evidenced through continuing low levels of churn. The 12.3% growth in the average mobile customer base combined with a 2.7% increase in ARPU resulted in a 15.2% increase in service revenue. ARPU growth was achieved through the continued success of non-voice services, driven predominantly by data cards, wireless email and messaging services. Verizon Wireless’ operating profit was impacted by efficiencies in other direct costs and operating expenses, partly offset by a higher level of customer acquisition and retention costs.
During the 2008 financial year, Verizon Wireless consolidated its spectrum position through the Federal Communications Commission’s Auction 73, winning the auction for a nationwide spectrum footprint plus licences for individual markets for US$9.4 billion, which was fully funded by debt. This spectrum depth will allow Verizon Wireless to continue to grow revenue, to preserve its reputation as the nation’s most reliable wireless network, and to continue to lead in data services to satisfy the next wave of services and consumer electronics devices.
The Group’s share of the tax attributable to Verizon Wireless for the year ended 31 March 2008 relates only to the corporate entities held by the Verizon Wireless partnership. The tax attributable to the Group’s share of the partnership’s pre-tax profit is included within the Group tax charge.