Excluding one-time charges, Verizon Communications (VZ) came in a penny short of analysts’ expectations of $0.55 EPS for the fourth quarter of 2009. Unfortunately for the company, it had to book $0.77 per share in special items including $0.66 per share to pay for layoffs in the fourth quarter. During the quarter, Verizon shed 7,413 employees, to finish the year with nearly 223,000 employees.

Operating income grew 9.9% from the same period in 2008, virtually all of which was due to the acquisition in 2009 of Alltel in January. Including Alltel on a pro-forma basis in the fourth quarter of 2008, Verizon’s operating revenue grew just 0.2%.

Verizon added 2.2 million customers in the fourth quarter, 1.2 million re tail customers and 1 million reseller customers. Total customer churn came in at 1.42%, up from 1.35% in the same period a year ago. For the year, total churn rose from 1.25% to 1.44%. While revenues rose for the full year, from $24.6 billion to $27.1 billion, average revenue per user (ARPU) fell 2.2% in retail services to $50.72.

The pick-up was in retail data ARPU, which rose more than 16% year-over-year and 20.5% including Alltel on a pro-forma basis. This number is where the growth is for Verizon and its competitors AT&T (T), Sprint Nextel (S) and T-Mobile (DT). Some observers estimate that 90% of the U.S. population already owns a wireless device. There are just two ways to make more money in such a market: steal market share or increase per user revenue.

Verizon’s new customers probably came from its competitors, and the company had to lure them with lower prices, cheap phones, or something. These costs hit margins. Wireless operating income fell from $713 million (6%) in the fourth quarter of 2008 to $291 million (2.5%) in the 2009 quarter. For the full year, wireless operating income was down nearly 49%, and margins fell from 8% to 4.3%.

Lower prices for wireless voice and messaging services must be replaced by higher numbers for data services. Verizon reported ARPU of $140 for its bundled voice, internet and TV services. That’s 175% better than retail services, and nearly 8 times better than retail data.

Verizon has a jump on its competitors in the retail data and broadband markets, and that’s where the company will work to increase revenue and profits. Lowering prices in the saturated phone market is Verizon’s loss leader. Roping in new customers for broadband is the new market, and Verizon looks pretty good there.

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