Verizon posted solid growth in fourth quarter as battle heats up with T-Mobile.
The telecommunications giant announced strong earnings after adding nearly 1.6 million new wireless customers under contract in the last quarter of 2013 -- down from 2.1 million a year ago, but up 70% from the third quarter.
Verizon swung to a profit of $5.1 billion, following a steep $4.2 billion loss a year ago when Hurricane Sandy caused significant issues for the company.
Shares in Verizon (Fortune 500) were down slightly in midday trading and ended the day down less than 1%. ,
Jonathan Schildkraut, a managing director at Evercore Partners, was impressed that 70% of Verizon Wireless' customers now have a smart phone -- generally a more expensive monthly plan. That was up from 58% a year ago.
As a result, Verizon is making more money from its customers. The average customer account pays Verizon more than $157 per month, up 7% from the same time a year ago.
The mobile phone market has recently become quite competitive in the United States -- largely thanks to underdog T-Mobile (. Long one of the smaller players in the U.S. cellphone market, over the past year T-Mobile has )launched a bid to take on big boys Verizon, Sprint (Fortune 500) and , AT&T (Fortune 500). The strategy includes aggressive pricing, the elimination of contracts, an improved coverage network and a offer to , reimburse people who break their current contracts with rival providers.
Though AT&T and Sprint have since introduced new plans and pricing to stave off the competition, Verizon has instead focused internally. It completed the $130 billion purchase of Vodafone's ( )share of Verizon Wireless last year, and Verizon announced Tuesday that it is purchasing a smart TV business development unit from Intel (Fortune 500). ,
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