Despite the economic slowdown, Verizon Communications Inc.'s revenues continued to grow in the first quarter of 2009.

Despite the general economic climate, sales remained strong for wireless, FiOS and strategic business services. Verizon Wireless reported 86.6 million total customers, up 28.8 percent; 84.1 million retail customers, up 29 percent; and 1.3 million net customer additions, excluding acquisitions and adjustments, almost all retail.

"The wireless industry continues to be very competitive, and we see plenty of upside potential in the area of wireless data," said Robin Nicol, spokeswoman for Verizon, Basking Ridge, NJ. "Nearly 80 percent of the growth in service revenue during the first quarter 2009 was driven by wireless data, which was up 36.8 percent compared with first quarter a year ago on a pro forma basis."

The main drivers of this growth are e-mail, broadband access and usage and messaging.

"Verizon Wireless has the largest and most reliable 3G broadband network in the U.S., which underpins our ability to grow wireless data services," Ms. Nicol said. "In addition, our Open Development Initiative and leadership in the deployment of LTE or 4G technology will incent application and device developers to create product and service capabilities that will dramatically expand the overall market potential for next-generation data technology.

"We recently announced plans to open the Verizon Wireless LTE Innovation Center later this year, which will provide an environment for testing, prototyping and trialing new LTE products and concepts," she said. "So, we are well positioned to take advantage of the potential in wireless data."

Verizon Wireless is the largest wireless company in the U.S. in terms of total customers and revenues.

Verizon Wireless saw a 29.6 percent increase in total revenues; retail postpaid churn of 1.14 percent; a 56.2 percent increase in data revenues; 28.2 percent operating income margin and 46 percent EBITDA margin on non-GAAP service revenues.

The integration of Alltel operations is on schedule, according to Verizon.

Verizon's total operating revenues grew 11.6 percent to $26.6 billion, compared with the first quarter 2008, as the company added revenues from its acquisition of Alltel Corp. in early January 2009.

On a pro forma basis, determined by consolidating the operating results of Verizon and the former Alltel as though the acquisition had occurred on Jan. 1, 2008, revenue growth was 3.3 percent.

Cash flows from operations totaled $6.4 billion for the first three months of 2009, up
$1.0 billion, or 19.1 percent, over the same period last year.

Capital expenditures totaled $3.7 billion in the first quarter 2009, and free cash flow -- cash flows from operations minus capital expenditures -- totaled $2.7 billion, up $1.5 billion from the first quarter 2008.

Verizon Wireless delivered strong net customer additions and sustained high margins, according to its parent company.

In the first quarter 2009, wireless retail (non-wholesale) gross customer additions, excluding customers acquired in the Alltel acquisition, were strong, up 32.5 percent over the prior year. On a pro forma basis, retail gross customer additions were up 4.3 percent.

Verizon Wireless had 86.6 million customers at the end of the quarter, an increase of
28.8 percent year over year. This includes 13.2 million net total customer additions, after conforming adjustments, from the Alltel acquisition.

The company also has the most retail customers of any U.S. wireless company and continued to grow its base, adding 1.3 million net retail customers, excluding customers acquired in the Alltel acquisition, for a total of 84.1 million retail customers.

Verizon Wireless had retail post-paid churn of 1.14 percent; total churn was 1.47 percent.

Revenues totaled $15.1 billion, up 29.6 percent year over year and up 9 percent on a pro forma basis.

Service revenues were $13.1 billion, up 28.9 percent year-over-year and up 10.5 percent on a pro forma basis, with continued growing demand for data services.

Data revenue was $3.6 billion in the first quarter 2009, up 56.2 percent, or 36.8 percent on a pro forma basis, from the first quarter 2008.

Service ARPU (average monthly service revenue per user) decreased 0.3 percent from the similar period a year ago, to $50.74.

Total data ARPU grew by 20.8 percent to $14.16. On a pro forma basis, service ARPU increased 1.1 percent, and total data ARPU increased 25.2 percent.

Wireless operating income margin, adjusted for acquisition-related charges and integration costs, was 28.2 percent, up 30 basis points year over year.

Adjusted on the same basis, EBITDA (earnings before interest, taxes, depreciation and amortization) margin on service revenues (non-GAAP) was 46 percent, an increase of 110 basis points year-over-year and 60 basis points on a pro forma basis.

At the end of the first quarter 2009, retail customers -- postpaid and prepaid -- represented
97 percent of the company's base.

Verizon Wireless claims to lead the industry in cost efficiency. Monthly cash expense per customer (non-GAAP) decreased in the first quarter 2009 to $27.38, from $28.05 in the comparable period in 2008.

In the first quarter, data revenues were nearly 28 percent of all service revenues, up from 23 percent in the first quarter 2008.

Verizon Wireless continued to extend the reach of its broadband network, which now covers approximately 281 million people.

In February, Verizon Wireless selected Ericsson and Alcatel-Lucent as vendors to supply the infrastructure that will enable the company to become the first wireless company to offer commercial LTE-based service in the U.S., starting in 2010. Field trials are under way.

During the quarter, Verizon Wireless customers sent or received an average of 1.4 billion text messages each day, totaling more than 127 billion text messages in the first quarter.

Customers also sent nearly 2.1 billion picture/video messages and completed 48.6 million music and video downloads during the quarter.

Verizon Wireless represented 57 percent of Verizon Communications' revenues during the first quarter 2009.

"Verizon Wireless posted very strong results and again led the industry with the highest net adds, the most retail net adds , the lowest churn and the highest EBITDA margin -- profitability," Ms. Nicol said. "Verizon Wireless' top- and bottom-line results continue to demonstrate our ability to consistently achieve both growth and profitability at the same time."