Verizon Loses Wireless Phone Customers -- 2nd Update
23 Abril 2019 - 12:14PM
Dow Jones News
By Sarah Krouse
Verizon Communications Inc.'s core wireless business lost
lucrative phone customers in the first quarter, as it offered fewer
promotions and focused on upgrading to a faster 5G network.
The carrier said it lost a net 44,000 postpaid phone connections
during the period, but continued to upgrade existing customers to
pricier tiers of its unlimited data plans. Those postpaid phone
losses were worse than some analysts expected and more severe than
the same time last year, when it lost 24,000 postpaid phone
connections. Verizon added a net 653,000 new postpaid phone
connections during the fourth quarter of 2018.
Wells Fargo analysts said last week that they expected Verizon
to lose 15,000 postpaid phone connections during the period because
it had been less generous with promotions than some of its
rivals.
Verizon executives said on an analyst call that there was a fair
amount of competitive activity in the first three months of the
year, and that the period is typically a weaker one than other
quarters for new connections. The carrier continued to increase the
number of connections per account and expected to sell more
so-called unlimited wireless plans, which currently comprise less
than half of the carrier's total connections, they added.
The largest U.S. carrier by subscribers highlighted ongoing
efforts to build out its 5G network and earlier this month began
offering 5G service in Chicago and Minneapolis, but received mixed
reviews from analysts who said the service's reach was limited. It
plans to roll out the service in parts of more than 30 cities
before the end of the year.
"We're best positioned to capitalize on all the opportunities
that 5G will bring to bear," Chief Executive Hans Vestberg told
analysts Tuesday.
In all, net income attributable to Verizon was $5 billion, up
about 11% from $4.5 billion a year earlier. Quarterly revenue
ticked up about 1% to $32.1 billion.
Verizon shares fell 3.4% in early trading.
The company is in the process of cutting $10 billion in costs by
2021 and said that it had trimmed $3 billion of that total so far,
helped by a voluntary severance program and expense savings.
Wireless carriers globally are racing to upgrade their networks,
hoping that the service's faster speeds, lower latency and ability
to connect more devices will bring in fresh revenue and spur new
applications across smart cities, health care and
manufacturing.
Meanwhile, wireless companies in a crowded U.S. market are
trying to sell additional connected devices and steal subscribers
from each other.
Verizon had 117.9 million wireless connections at the end of
March, down from 118 million at the end of 2018. It is the first
major U.S. carrier to report quarterly earnings; rivals including
AT&T Inc. will share their performance later this week.
Verizon said it added 261,000 connections for smartwatches and
other connected devices, but lost 156,000 tablet connections.
Revenue within Verizon's media unit was $1.8 billion during the
quarter, down 7.2% from a year ago. It said the business continued
to suffer from declines in desktop advertising revenue, even as its
mobile advertising revenue grew.
Verizon's landline business added 52,000 net new home broadband
connections during the first quarter of 2019 and lost a net 53,000
Fios video customers. Fios has lost pay-television customers over
the last two years as a result of cord-cutting and the growth of
streaming services like Netflix Inc.
The company also announced a new partnership with Alphabet
Inc.'s YouTube TV to offer the service free to Verizon's mobile,
Fios internet and 5G home customers.
Matt Ellis, Verizon's chief financial officer, said in an
interview that its pay-TV service remained important.
"For the customers that want the more traditional bundle, we
have it, it's called Fios TV. For customers that want OTT, we have
it," Mr. Ellis said.
Verizon has opted not to make large new investments in media
content and instead partner with other companies.
Executives told analysts they don't anticipate pursuing a
large-scale acquisition and are instead focused on investing in the
business, maintaining the company's dividend and completing small
deals.
Write to Sarah Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
April 23, 2019 10:59 ET (14:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Verizon Communications (NYSE:VZ)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024
Verizon Communications (NYSE:VZ)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024