Why Verizon is losing more cellphone customers than ever

Verizon's decision in recent years to give away free tablets as a way to juice subscriber numbers is also coming back to haunt it, as numerous customers who signed up for two-year data plans in exchange for a free tablet aren't renewing their subscriptions.

Telecommunications giant Verizon Communications (NYSE:VZ) reported first-quarter earnings on Monday morning, which included the first time it's ever reported net postpaid wireless subscriber losses.

Competition from Sprint - as well as T-Mobile - appears to be taking its toll on Verizon. The performance marks a dramatic reversal from the first quarter of past year, when Verizon added 640,000 users.

Verizon's total turning revenues, including all the recorded wireline services, were $29.8 billion in the first quarter.

"They badly missed on every important subscriber metric, and it just underscores that the wireless business is a severely growth-challenged business at the moment", said Craig Moffett, an analyst at MoffettNathanson in an interview.

The launch of Verizon Unlimited positively changed the trajectory of customer additions in the quarter. It is a good news for Verizon since as reported earlier before the unlimited plan promo, the company is losing a huge number of customers. But once the new plans became available, they helped blunt those losses by bringing in about 110,000 new subscribers, Verizon said.

The company has also pursued revenue streams outside its core wireless business.




Most of the drop came in the weeks before Verizon introduced its "unlimited" data plan.

Verizon's retail postpaid connections base grew 1.2 percent year over year to 108.5 million, and retail prepaid connections grew 0.5 percent to 5.4 million. Verizon's churn increased from 1.03 to 1.15 percent of all customers in the first quarter, a strong sign that the race-to-the-bottom between the carriers is starting to see results.

Analysts polled by Thomson Reuters expected per-share profit of 96 cents on $30.5 billion in revenue.

Verizon has been able to retain customers thanks to its high-quality network. In premarket trading on Thursday, the company's shares sunk over 2%, while the stocks have dropped by over 8% from the starting of this year. Verizon's main competitor AT&T Inc. plans to diversify its business through an $85.4 billion acquisition of Time Warner Inc. and has already purchased satellite TV company DirecTV. "We're executing on strategies to capture future growth and create long-term shareholder value", he said.

The results fell short of Wall Street expectations.

Elsewhere, Verizon says tablet churn was high compared to the previous year, while LTE network use rose around 57-percent versus Q1 2016.

Verizon added 35,000 FiOS internet connections but lost a net 13,000 FiOS Video connections during the quarter.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

5 things to know about Tax Day: refunds are up, audits down
Although the American people will not be able to hold Trump accountable for what's in his tax documents, the IRS certainly will. It is precisely those conflicts of interest that those who want Trump to release his tax returns seek to shed light on.

Hillary Clinton apologized to Obama on election night
To this end, she had a trusted aide access the campaign's server and download the e-mails sent and received by top staffers. Obama's legacy and the dreams of her presidency lay shattered at Donald Trump's feet.

Ann Coulter vows to speak at Berkeley despite cancellation
Tucker Carlson criticized the school for claiming they respected the First Amendment while deciding to strip Coulter of her's. But Berkeley isn't the only university struggling with free speech and its potential risks.

Mountain lion suspected of snatching dog from family's bedroom
The dog's carcass has not been found, but bloodstains were found near the door - the lone signs of an intruder, Fought told CBS. Neighbors have been warned to be especially wary of mountain lions after one displayed such boldness.

Daesh car-bomb attack kills 16 in W. Mosul: Iraqi army
Iraqi forces forced Islamic State out of the eastern side of the city in January. It is unclear how exactly the two group may work together, Allawi said.

Richard Spencer speech yields three arrests at Auburn University
As one of the internet users cleverly noted, Spencer says everything the KKK men or nazis would, not using "jew" or the n-word. Auburn cancelled the speech on Friday, citing safety concerns, but was overruled by a federal judge on Tuesday.

Pence to visit mosque in Indonesian capital
Pence has been working with Japanese Prime Minister Shinzo Abe to discuss options for stopping nuclear proliferation in the area. CNN's Dana Bash reported from on board the USS Ronald Reagan , while CNN's Joshua Berlinger reported and wrote from Hong Kong.

VP Pence says United States commitment to Korea "iron-clad"
Trump has stated that he wants to see China take a larger role in pressuring the North Korean regime. Kim stressed that U.S. (Pence) "We hope to achieve this objective through peaceable means".

Faith community celebrates Easter
All that Jesus had told them was now coming back to them and was making sense to them. all was being fulfilled as Jesus had said. For Christians, Easter celebrates the rising of Christ from the grave three days after his crucifixion and death.

Rain, thunderstorms in forecast as the weekend approaches
There will be a slight chance of rain in Fontana on Tuesday , April 18, according to the National Weather Service . There's a chance for thunderstorms after 2 p.m., and southwest wind will blow between 8 and 11 miles per hour .

In Church-State Playground Brawl, Justices Lean Toward The Church
Those are legitimate objectives for the state in avoiding an unconstitutional entanglement with religion, Layton argued. Three-quarters of the USA states have provisions similar to Missouri's barring funding for religious entities.

Islamic State mufti killed in Mosul air strike
More recently, he has given the authority for IS to continue to attack civilians in the eastern side of Mosul, which Iraqi forces have recaptured.

ACC extends deals with North Carolina sites after law change
Columbus will play host to first and second round NCAA men's basketball tournament games in 2019 at Nationwide Arena. The fourth championship, Division III women's ice hockey, does not select predetermined sites.

Didier Drogba joins United States side Phoenix Rising as player and executive
I have taken my time in deciding what I wanted to do next and am really excited about the opportunity at Phoenix Rising FC . The USL has continued to elevate its role in the North American soccer landscape, securing Division II status from the U.S.

With Rajon Rondo at the controls, Chicago Bulls are running and gunning
The Jazz played without center Rudy Gobert , who was ruled out of the game and questionable for Game 3 with a left knee sprain. Utah closed within three points early in the third on a basket by Derrick Favors, who started in place of injured Rudy Gobert.


More News

News
More News