Bengaluru, India – Verizon Communications faced unexpected challenges in the first quarter as the U.S. telecom giant struggled with a higher loss of wireless subscribers than anticipated by Wall Street analysts. The company’s shares declined 3.4% in premarket trading following the news.
In response to aggressive promotions from competitors such as AT&T and T-Mobile, Verizon warned of slower subscriber growth due to off-season promotions and increased competition in the industry. The company implemented price hikes in January for its myPlan and New Verizon Plan accounts, resulting in a higher churn rate as customers reacted unfavorably to the changes.
CEO of Verizon Consumer, Sowmyanarayan Sampath, expressed how the price increases led to more customers leaving the service, with a loss of 289,000 monthly bill-paying wireless subscribers in the first quarter. This significant drop came after the company added a record number of customers in the previous quarter, highlighting the unpredictable nature of the telecom market.
Despite these setbacks, Verizon introduced a three-year price guarantee in April to retain customers for its myPlan and myHome offerings. Additionally, the company reaffirmed its annual adjusted profit and free cash flow outlook, demonstrating confidence in its business strategy amidst economic uncertainties.
Overall, total revenue for Verizon in the first quarter increased by 1.5% to $33.5 billion, exceeding analysts’ estimates. Wireless service revenue also saw growth of 2.7% to $20.8 billion, helped by the implemented price hikes. Looking ahead, Verizon remains focused on retaining customers and adapting to the evolving landscape of the telecom industry.