Verizon Wireless customers top 94M in Q4

Feb. 10 iPhone launch on Verizon will be watched carefully for its impact

Verizon Wireless increased subscribers to 94.1 million in the fourth quarter, up from 93.2 million in the third quarter, a small increase that shows how saturated the U.S. wireless market has become even for the top wireless player.

The iPhone coming to Verizon on Feb. 10 , could improve that picture, but Verizon isn't issuing an official forecast for how much. The carrier's parent, Verizon Communications, announced fourth-quarter results Tuesday for its wireless and other divisions.

AT&T, which will announce its fourth-quarter results Thursday, had 92.8 million subscribers at the end of the third quarter. Some analysts believe AT&T will surge ahead of Verizon Wireless subscriber totals for the fourth quarter, but then fall behind again once Verizon Wireless starts sellig the iPhone .

The fallout from AT&T iPhone users switching to Verizon could be 10% to 20%, analysts said, but it will take months for some AT&T subscribers on contracts to switch over. The latest ChangeWave survey of 4,000 U.S consumers said 26% of iPhone customers would leave AT&T for Verizon, citing dropped calls and poor reception with AT&T's network.

Verizon on Friday launched a TV ad that builds on the drama of its Feb. 10 iPhone launch and serves as an indication of how important the device will be to the carrier.

Apple began airing its own iPhone TV ad over the weekend that shows two iPhones side-by-side with the Blue Danube waltz as the background music. It concludes with the words, "Two is better than one," referring to having both Verizon Wireless and AT&T carrying the iPhone. See the YouTube video .

Verizon said its increase of 872,000 contract wireless customers in the fourth quarter came largely from new smartphones running Google 's Android operating system. That number was ahead of most analyst estimates, which were in the range of 600,000 added contracts.

Generally, analysts believe the long-term picture for customer gains of more than 1 million a quarter at AT&T and Verizon is limited by market saturation where those two carriers alone command nearly 200 million customers. In some countries, customers own multiple wireless devices each.

In the U.S., to some extent, the major carriers are hoping interest in tablet computers, such as the iPad and the Galaxy Tab, will allow continued expansion of the wireless customer base. That expansion could come when a a smartphone customer, for example, adds a tablet computer on a second wireless contract or purchases plenty of data usage each month on a no-contract basis.

Some early adopters and tech-savvy customers are willing to spend thousands of dollars annually for data, text and voice over wireless. However, the carriers also recognize that a much larger group of customers will spend more conservatively.

As a result of the market pressures, analysts are carefully watching what impact the atttractive iPhone will have at Verizon.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed . His e-mail address is mhamblen@computerworld.com .

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