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Verizon sees growth in wireless data usage

The fact that telecommunications giant Verizon Communications Inc. reported growth in text message, picture message and video message usage proves that the mobile channel can be effective.

Verizon reported 36.5 billion SMS messages sent and received last quarter, up from 14.4 billion in the same period last year . There were 721 million picture and video messages sent and received, up from 290 million in 2006. Additionally, customers completed 29.7 million music and video downloads.

"During the third quarter, we saw strong topline performance in our key growth areas," said Doreen Toben, chief financial officer, Verizon, Basking Ridge, NJ, on an investor conference call Monday, Oct. 29. "Wireless revenues were up 14.4 percent, legacy consumer revenues grew 3.1 percent and Verizon Business revenues increased 2.2 percent compared to a year ago. This revenue growth has resulted in higher average revenue per user (ARPU) and margin expansion."

Verizon's total third quarter earnings were $23.8 billion, of which $11.3 billion was from wireless traffic. Total data revenue for Verizon Wireless was up 63.4 percent from the year before.

JupiterResearch analyst Neil Strother said that marketers should pay attention to the increase in mobile data access.

"For marketers, this quarter's numbers -- 2 billion in non-voice revenue -- indicate there's a growing number of people accessing data through their phones, and that can be monetized," Mr. Strother said.

Verizon Wireless offers 25 multimedia phones that are capable of multimedia downloading and Internet browsing at broadband speeds. The Voyager, which will be available for the holiday season, has both voice and data capability and features a touch screen and QWERTY keyboard.

Other fourth quarter offerings will include the Juke by Samsung, the Venus by LG, and the BlackBerry Pearl -- the first 3G Pearl. In the last quarter more than 97 percent of Verizon's customer base was retail. The company added 1.8 million retail customers, compared to 2 million net customers reported by AT&T, Inc.

"Clearly there's growth but it's more incremental than monumental," Mr. Strother said. "It's early, in a sense, but it's a good time for marketers to jump in and experiment and find out what's working."