Verizon’s Profit Climbs

Verizon Wireless, the nation’s largest cellphone carrier, isn’t gaining as many new contract subscribers as it has in the past. But its profits remain strong thanks to swelling revenue from mobile data — the fees it collects for Internet use — and healthy smartphone sales.

Verizon Communications, the parent company of the wireless business, reported on Thursday that its net income in the second quarter rose 13.4 percent to $1.8 billion, or 64 cents a share, from the same quarter a year earlier.

The company said revenue climbed 3.7 percent to $28.6 billion.

The net income was in line with expectations of Wall Street analysts, according to a survey by FactSet. (The company’s overall net income, which includes pretax operating income for Vodaphone, which owns 45 percent of Verizon’s wireless unit, was $4.3 billion, a 19.3 percent increase.)

Verizon, based in New York, said that smartphone sales and revenue from its cellphone subscribers helped it in the quarter.

“Verizon Wireless has once again demonstrated its industry leadership, combining strong revenue growth with record margins and high customer loyalty,” said Lowell McAdam, Verizon’s chief executive, in a statement.

Over the quarter, Verizon Wireless added 888,000 contract subscribers, the most valuable type of customer for the company, down from 1.26 million in the year-ago quarter. But total revenue from mobile data was $6.9 billion, up 18.5 percent from a year ago.

Those results perpetuate an industry-wide trend: Contract subscriber growth is slowing because most people who want cellphones already have one. So now the carriers are lifting profits with different pricing structures for mobile data, or by snatching away each other’s customers with new smartphones and faster data networks.

Verizon sold 5.9 million smartphones over the quarter, including 2.9 million Droid handsets and 2.7 million iPhones. Typically around this time of year, iPhone sales slow down because many expect Apple to introduce an upgraded version of the phone in the fall. Nonetheless, Apple’s handset was instrumental to Verizon’s growth: A quarter of the people buying iPhones were new to Verizon. Over all, 73 percent of Verizon’s phone sales to subscribers were smartphones.

Verizon is leading the race in the United States to build faster fourth-generation networks, using a technology known as Long Term Evolution (LTE). It has LTE deployed in 337 cities, compared with AT&T, which has installed it in 47 cities.In late June, Verizon introduced “shared data” plans, which allow customers to pay for a pool of wireless data and share it across multiple smartphones, tablets and laptops, a first for the American wireless industry. For customers who are new to Verizon, the shared plans and prepaid plans will be their only options; the older tiered data plan is no longer available to new customers.

The shared plans came into effect too late to have an impact on Verizon’s earnings, but some analysts noted that imposing shared plans on new subscribers was a bold move. The plans offer value to high-income families who already spend a lot for data, text and phone services, but not to people who are not heavy users and are trying to save money.

Fran Shammo, Verizon’s chief financial officer, said on a conference call that the company didn’t expect to see an immediate impact from the shared data plans. But he said that the new pricing structure was already prying some customers away from their older unlimited data plans, which will help the company make more money over time.

“The benefit we do see is that we are seeing some 3G unlimited customers move into our 4G shared data plan product,” Mr. Shammo said. “That is excellent for us.”

Following Verizon, AT&T introduced its shared data plans on Wednesday with nearly identical pricing.

Tero Kuittinen, an independent mobile analyst and vice president of Alekstra, a company that provides services to help consumers reduce their cellphone bills, said that the shared data plans were a sign that Verizon and AT&T had grown confident that they would not lose subscribers to smaller rivals, no matter how expensive their plans get.

“This is what happens in a duopoly,” Mr. Kuittinen said in an interview. “One company raises prices, and the other does the same thing. It looks like AT&T and Verizon have both concluded that they’re not serious competitors.”