Amid competition, Verizon loses key customers for first time

Verizon is seen at a retail store in San Diego California
Verizon is seen at a retail store in San Diego California
Author

21 April, 2017

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.

Verizon Communications Inc VZ.N , the No. 1 US wireless carrier, reported a 20 percent fall in quarterly profit as it lost wireless postpaid subscribers despite the re-launch of unlimited data plans. This measure was taken in a bid to defeat the appeal of the same kind of offers from Sprint and T-Mobile.

Verizon's total consolidated operating revenues in the first-quarter of 2017 were $29.8 billion, a 7.3% decrease compared with first-quarter 2016.

This New York-based carrier was once the superlative leader of the wireless industry in the U.S., whereas now it is battling to retain subscribers and getting them to opt for the paid premium service.

Do wireless customers really care about unlimited data on their cellphone plans?

The move into unlimited data marked an about-face for Verizon, which steadfastly has refused to offer unlimited data plans for fear of obliterating the bottom line, choosing instead to focus on network quality for the highest-paying customers. Long-term, the shift to unlimited is likely to hurt Verizon's profits, as it's simply less profitable to sell an unlimited data plan for $80 than it is to sell 10GB of data for $140. This in turn affected its financials - the company experienced a decline of 5.1% in its wireless business revenue.

This earnings release is the first glimpse at how Verizon has fared since launching an unlimited data plan in February.

More news: Donald Trump the Golfer

Verizon has explored smaller as well as bigger deals, though nothing has worked out for the company.

Our first-quarter results again demonstrated that customers value a high-quality network experience.

After Verizon rolled out its plan, however, it saw 109,000 retail postpaid phone connections, a significant turnaround.

Meanwhile, Verizon's main competitor AT&T Inc T.N plans to diversify its business through an $85.4 billion acquisition of Time Warner Inc TWX.N , which would give it control of cable TV channels like HBO and other coveted media assets. Verizon has also purchased AOL.

The stock closed down more than 1 percent on Thursday.

In a call with analysts, Matt Ellis, the Chief Financial Officer of the company said - "We're confident in executing our strategy organically, but if there's the right opportunity out there to accelerate the strategy inorganically in a way that adds shareholder value, we're always looking at those opportunities". Excluding those one-time items, Visa had an adjusted profit $2.1 billion, or 86 cents per share, which beat analysts' expectations.

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


More news


  • Jose Mourinho reveals the tactic that allowed Manchester United to beat Chelsea

    Jose Mourinho reveals the tactic that allowed Manchester United to beat Chelsea

    Meanwhile, Marcus Rashford was at his absolute best throughout last night's game. So far it has been okay for me but I still have to show I can give more.
    Ann Coulter vows to speak at Berkeley

    Ann Coulter vows to speak at Berkeley

    They added that they could not guarantee the safety of Coulter or her audience at the proposed speech. Group members have stressed that they have "no intention of acceding to these unconstitutional acts".
    Japan PM: NKorea may be capable of sarin-loaded missiles

    Japan PM: NKorea may be capable of sarin-loaded missiles

    According to South Korea's 2016 Defense White Paper, North Korea has been developing chemical weapons since 1980. South Korea has long said it believes the North can conduct its sixth nuclear test whenever it chooses.
  • Here's how the H-1B visa program works

    Here's how the H-1B visa program works

    Pinchuk said he believes it's actually the "seminal issue of our time", because we're in a global competition for jobs. India has a message for President Trump: Curbing visas for skilled workers won't solve America's problems.
    Marauding mountain lion snatches family dog

    Marauding mountain lion snatches family dog

    When the resident went out after the dog, she discovered large wet paw prints at the bedroom's entrance. The California Department of Fish and Wildlife was notified for further investigation.
    Daesh car-bomb attack kills 16 in W. Mosul: Iraqi army

    Daesh car-bomb attack kills 16 in W. Mosul: Iraqi army

    Nearly 330,000 people have fled Mosul since Iraq started an operation to expel Islamic State in October. Iraqi forces forced Islamic State out of the eastern side of the city in January.
  • Odd  brew: People are freaking out over the Starbucks Unicorn Frappuccino

    Odd brew: People are freaking out over the Starbucks Unicorn Frappuccino

    It's just launched a flavour-changing, colour-changing drink called the Unicorn Frappuccino . The eye-catching Frappuccino starts out as a purple drink with a sweet and fruity flavor.
    NCAA expected to announce tournament host sites today

    NCAA expected to announce tournament host sites today

    The ACC Women's Golf Championship will return to Greensboro's Sedgefield Country Club (Ross Course) on April 20-22, 2018. The conference now says that the football title game will return to Charlotte for its contractual run there through 2019.

    Trump stops short of labeling China, Germany currency manipulators

    US 100 dollar banknotes and Chinese 100 yuan banknotes are seen in this picture illustration in Beijing, China, January 21, 2016. The department, however, said that both China and Germany should do more to reduce their large trade surpluses with the US.
  • Kylie Jenner was 'really sad' after seeing ex-boyfriend Tyga

    With that in mind, there's an understanding as to why she simply can't let go off the relationship as much as she may want to. The 19-year-old star flaunted her neon yellow locks on Instagram and called it "highlighter hair".
    The three-variant Clarity is one of Honda's most advanced creations

    The three-variant Clarity is one of Honda's most advanced creations

    So within the next few years, drivers might have the choice of driving hydrogen-powered cars in places other than California. Past that point, the gasoline motor will generate electricity as well as propulsion for a total range of 330 miles.
    San Bernardino School Shooting: Slain Teacher, Student & Shooter Identified

    San Bernardino School Shooting: Slain Teacher, Student & Shooter Identified

    We're not supposed to have to worry about our kids coming home alive when we drop them off at school in the morning. Police later confirmed that one of the students, eight- year-old Jonathan Martinez , had died.