Verizon: Another Data Point Suggesting a Slow Down in Seasonal Spending

The first three quarters of 2011 were strong for Verizon from a capital spend perspective, so it came as no surprise the fact that 4Q CAPEX will probably increase less sequentially than in past years, following a similar dynamic to AT&T. Typically, in years past, the Verizon 4Q CAPEX would rise in the 11-13% range, however we believe CAPEX will only rise by ~6% this time around. This has already been factored in by guidance offered by Verizon suppliers such as Adtran and Juniper, which reported 3Q results with lower/revised guidance for 4Q.

Verizon's 4G LTE network now reaches over 186 million Americans, surpassing the 185 million goal (by YE 2011) set by the company in 2010. In mid-November, Verizon will light up 13 more markets, for a total of 178 markets. 52% of its new postpaid subscribers (882,000 altogether) are coming from 4G subs (smartphones and Internet and data devices). Verizon sold 1.4 million 4G LTE devices last quarters, half of which were smartphones.