Verizon's postpaid phone customers take a hike after prices are raised
Verizon can't be surprised after announcing that 289,000 postpaid phone customers left the carrier during the first quarter matching the worst three month period ever recorded by the nation's largest wireless provider. Postpaid phone customers are the most valuable to companies like Verizon because they usually don't change carriers often, and they shell out for the most expensive plans. They are called postpaid customers because they pay their monthly bills after receiving their monthly service.
The reason why Verizon shouldn't be surprised by the big decline in postpaid phone customers is because the wireless provider did something that usually leads to a drop in subscribers. It raised its prices. Tony Skiadas, Verizon's CFO, had this to say during the carrier's conference call following today's Q1 earnings release, "Our consumer postpaid phone net losses ... reflect the impact of recent pricing actions."
Previous price hikes seemed to have little impact on Verizon customers but this time the cumulative total hit subscribers right between the eyes. Despite the large number of postpaid phone subscribers saying goodbye to Verizon after Q1, the company says that it is still on track to report higher postpaid phone net additions this year. Verizon consumer chief Sowmyanarayan Sampath notes that over the last few weeks there has been a reversal with consumer growth picking up toward the end of March and the first half of this month.
""Verizon plays an essential role in our customers’ lives and our differentiated value proposition delivers what customers want and need, on their terms. We continue to drive our multi-year customer-first strategy, launching new programs such as our 3-year price lock and free phone guarantee for consumers and My Biz Plan for small and medium sized businesses. With our high quality customer base, network superiority and position of financial strength, we have the momentum and flexibility to continue
innovating to meet customer needs and invest for growth."
innovating to meet customer needs and invest for growth."
-Verizon Chairman and CEO Hans Vestberg
KeyBanc Capital Markets told its investors that the 289K drop in postpaid phone subscribers was worse than analysts' consensus forecast calling for a drop of 211,000. The actual drop was the worst quarter reported by Verizon since 2017. Verizon said that consumer wireless revenue hit $17.2 billion for the first quarter which was a small 2.6% year-over-year gain. Wireless retail postpaid phone churn was 0.90 percent during Q1.
During the first quarter, Verizon Wireless reported an industry leading $20.8 billion in wireless industry revenue. For all of 2025, Verizon expects to see total wireless service revenue growth of 2.0 percent to 2.8 percent and earnings per share to grow 0% to 3%.
Verizon's shares rose 27 cents or .63% today to $43.19. In after hours trading, the shares tacked on an additional 11 cents to $43.30. That price is much closer to Verizon's 52-week high of $47.36 than its 52-week low of $37.58.
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