Verizon Wireless 2014 Annual Report Download - page 23

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Wireline
Our Wireline segment provides voice, data and video communications products and enhanced services, including broadband video and data, cor-
porate networking solutions, data center and cloud services, security and managed network services and local and long distance voice services. We
provide these products and services to consumers in the United States, as well as to carriers, businesses and government customers both in the
United States and around the world.
OnJuly1,2014,ourWirelinesegmentsoldanon-strategicbusiness(see“AcquisitionsandDivestitures”).Accordingly,thehistoricalWirelineresultsfor
these operations, which were not material to our consolidated nancial statements or our segment results of operations, have been reclassied to
Corporate, eliminations and other to reect comparable segment operating results.
Operating Revenues and Selected Operating Statistics (dollars in millions)
Increase/(Decrease)
Years Ended December 31, 2014 2013 2012 2014 vs. 2013 2013 vs. 2012
Consumer retail $ 15,583 $ 14,842 $ 14,145 $ 741 5.0 % $ 697 4.9 %
Small business 2,464 2,541 2,601 (77) (3.0) (60) (2.3)
MassMarkets 18,047 17,383 16,746 664 3.8 637 3.8
Strategic services 8,326 8,140 7,737 186 2.3 403 5.2
Core 5,358 6,042 6,840 (684) (11.3) (798) (11.7)
Global Enterprise 13,684 14,182 14,577 (498) (3.5) (395) (2.7)
Global Wholesale 6,222 6,594 7,094 (372) (5.6) (500) (7.0)
Other 476 465 528 11 2.4 (63) (11.9)
Total Operating Revenues $ 38,429 $ 38,624 $ 38,945 $ (195) (0.5) $ (321) (0.8)
Connections ('000):(1)
Total voice connections 19,795 21,085 22,503 (1,290) (6.1) (1,418) (6.3)
Total Broadband connections 9,205 9,015 8,795 190 2.1 220 2.5
FiOSInternetsubscribers 6,616 6,072 5,424 544 9.0 648 11.9
FiOSVideosubscribers 5,649 5,262 4,726 387 7.4 536 11.3
(1) As of end of period
Wireline’srevenuesdecreased$0.2billion,or0.5%,during2014com-
pared to 2013 primarily driven by declines in Global Enterprise Core and
Global Wholesale, partially oset by higher Consumer retail revenues
drivenbyFiOSservicesandincreasedStrategicservicesrevenueswithin
Global Enterprise.
Mass Markets
MassMarketsoperationsprovidebroadbandservices(includinghigh-
speedInternet,FiOSInternetandFiOSVideoservices),localexchange
(basic service and end-user access) and long distance (including regional
toll) voice services to residential and small business subscribers.
2014 Compared to 2013
MassMarketsrevenuesincreased$0.7billion,or3.8%,during2014com-
paredto2013primarilyduetotheexpansionofFiOSservices(Voice,
InternetandVideo),includingourFiOSQuantumoerings,aswellas
changes in our pricing strategies, partially oset by the continued decline
oflocalexchangerevenues.FiOSrepresentedapproximately76%of
Consumer retail revenue during 2014 compared to approximately 71%
during 2013.
During2014,wegrewoursubscriberbaseby0.5millionFiOSInternet
subscribers and by 0.4 million FiOS Video subscribers, while also
improving penetration rates within our FiOS service areas. As of
December 31, 2014, we achieved penetration rates of 41.1% and 35.8%
forFiOSInternetandFiOSVideo,respectively,comparedtopenetration
ratesof39.5%and35.0%forFiOSInternetandFiOSVideo,respectively,at
December 31, 2013.
TheincreaseinMassMarketsrevenueswaspartiallyosetbythedecline
of local exchange revenues primarily due to a 5.5% decline in Consumer
retail voice connections resulting primarily from competition and tech-
nology substitution with wireless, competing VoIP, and cable telephony
services. Total voice connections include traditional switched access
linesinserviceaswellasFiOSdigitalvoiceconnections.Therewasalso
a decline in Small business retail voice connections, primarily reecting
competition and a continuing shift to both IP and high-speed circuits.
2013 Compared to 2012
MassMarketsrevenuesincreased$0.6billion,or3.8%,during2013com-
paredto2012primarilyduetotheexpansionofFiOSservices(Voice,
Internet and Video) as well as changes in our pricing strategies, partially
oset by the continued decline of local exchange revenues.
During2013,wegrewoursubscriberbaseby0.6millionFiOSInternet
subscribersandby0.5millionFiOSVideosubscribers,whilealsoconsis-
tentlyimprovingpenetrationrateswithinourFiOSserviceareas.Asof
December 31, 2013, we achieved penetration rates of 39.5% and 35.0%
forFiOSInternetandFiOSVideo,respectively,comparedtopenetration
ratesof37.3%and33.3%forFiOSInternetandFiOSVideo,respectively,at
December 31, 2012.
Theincreasein MassMarkets revenues,drivenbyFiOSservices, was
partially oset by the decline of local exchange revenues primarily due
to a 5.2% decline in Consumer retail voice connections resulting pri-
marily from competition and technology substitution with wireless,
VoIP, broadband and cable services. Total voice connections include
traditionalswitchedaccesslinesinserviceaswellasFiOSdigitalvoice
connections. There was also a decline in Small business retail voice
connections, primarily reecting competition and a shift to both IP and
high-speed circuits.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued