On Tuesday, Verizon posted its fourth-quarter 2012 earnings, and its profit margin (based on earnings before interest, taxes, depreciation and amortization, or EBITDA) on the wireless side of the firm fell from 42.2 percent to 41.4 percent year over year. The stock is off slightly on the day—as of this writing Verizon (VZ) is hovering around $42.86 per share.

Analysts attribute the downturn to subsidies on handsets (particularly iPhones); rival T-Mobile said it would eliminate such deals in December 2012.

"Handset subsidies on the wireless side [are] clearly a major issue for them," Stifel Nicolaus analyst Christopher King, who expected a margin of 42 percent, told Reuters. "They came in at the low end of people's expectations."

Verizon also said that “smartphones accounted for more than 58 percent of the Verizon Wireless retail postpaid customer phone base, up from 53 percent at the end of third-quarter 2012.”

The wireless carrier also trumpeted the fact that it took on the “highest number of retail postpaid net additions of any quarter in its history,” and the fact that users’ bills are now higher than they’ve ever been.

“Retail postpaid ARPA (average revenue per account) grew 6.6 percent over fourth-quarter 2011, to $146.80 per month,” the company wrote in its 8-K filing with the Securities and Exchange Commission. “As customers continue to add multiple devices to accounts following the introduction of the Share Everything Plan in June, Verizon Wireless now reports ARPA instead of ARPU since customers can share data among multiple devices.”

Earlier this month, we reported on the fact that the Federal Communications was none too happy with Verizon’s service outages in the wake of Superstorm Sandy last year. Verizon’s corporate leaders and investors feel the same way, as it was forced to spend $135 million of corporate capital as a result of the storm’s recovery efforts, and was hit with a “7-cent-per-share impact due to Superstorm Sandy.”