• by Mark Walsh  @markfwal, April 21, 2011

Verizon Communications more than tripled first-quarter profits as the rollout of the iPhone helped pull in new wireless subscribers. Verizon Wireless added 906,000 contract subscribers during the quarter, more than double a year ago.

Verizon began selling the iPhone on February 10, ending AT&T's exclusive deal to distribute the Apple smartphone in the U.S. It activated 2.2 million iPhones during the quarter, putting Verizon on pace to meet its estimate of selling 11 million by the end of 2011.

Verizon overall reported net income of $1.44 billion, or 51 cents a share -- up from $443 million, or 16 cents, a year ago. Revenue was up 0.3% to $26.99 billion. Both figures were slightly ahead of analyst expectations.

AT&T said it had activated 3.6 million iPhones during the quarter, but added just 62,000 contract customers, a record low. Not many AT&T iPhone subscribers have switched to Verizon yet -- as they are still locked into two-year contracts.

Apple yesterday reported selling 18.65 million iPhones in the most recent quarter, more than double the total a year earlier. That helped the company post another blowout quarter, with a profit of nearly $6 billion on revenue of $24.7 billion.

In addition to the iPhone 4, Verizon said Thursday that demand has been strong for its first 4G LTE devices, including the Android-based ThunderBolt by HTC. After launching 4G service in December in 38 markets, the carrier has since expanded to another 100 and expects to offer 4G in 175 markets, reaching 185 million people by year's-end.

Verizon also plans to follow AT&T's lead by introducing tiered mobile data pricing for 3G and 4G devices by midsummer, but has not yet provided details.

At the end of the first quarter, Verizon had 104 million total wireless customers -- a 6% increase from a year ago. Its churn rate among contract customers improved to 1.01% and nearly one-third (32%) of those subscribers have smartphones, up from 28% the prior quarter. Verizon expects that smartphone-owning proportion to grow to 50% by the end of 2011.

That trend, in turn, could help push Verizon's mobile data revenue even higher. Data sales in the first quarter increased $1 billion to $5.5 billion from a year ago and now make up 38% of all service revenue.