Verizon reported a net loss of 189,000 consumer phone subscribers and a churn rate of 0.88%
Verizon reported mixed third-quarter results today as revenues topped estimates at $34.2 billion, an increase of 4% from third-quarter 2021, but also added a mere 8,000 postpaid phone subscribers, well below the 32,000 estimate. To further put that meager subscriber growth in perspective: AT&T reported yesterday that it added 708,000 total postpaid phone subscribers in the same period.
Worse, Verizon reported a net loss of 189,000 consumer phone subscribers during Q3 and a subscriber churn rate of 0.88%, up from 0.75% in the second quarter. CEO Hans Vestberg, who had previously warned investors of this potential reality, said on the earnings call that the increased churn rate is likely due to “recent pricing actions.”
“For postpaid, we are focused on attracting and retaining high-quality consumers in a disciplined and measured approach,” Vestberg said. He added that while there is clearly “more progress to be made,” he is confident in the carrier’s premium strategy. “We ended the third quarter with 50% of our customers having a 5G phones and 81% of our base is on unlimited plans,” he offered.
On the upside, Verizon’s Q3 total wireless service revenue was $18.8 billion, a 10% increase year-over-year, and Verizon Business accounted for a Q3 revenue of $7.8 billion, an increase of 1.9% year-over-year.
According to Vestberg, momentum remains strong for Verizon Business and its growth this past quarter can be attributed to several 5G fixed wireless access (FWA) and mobility infrastructure deals, including ones made with Fujifilm and Astellas Pharma , as well as several others with the U.S. Department of Defense.
Verizon added 377,000 broadband connections in Q3, up from 109,000 in the previous quarter. This number includes 342,000 fixed wireless net additions, which increased from 86,000 from the previous quarter. Further, more than 40 million households are covered by Verizon fixed wireless, and more than 30 million households are covered by 5G Ultra Wideband.
Vestberg also provided an update on Verizon’s progress with C-band, the deployment of which has led to a notable improvement in the carrier’s 5G download speeds, according to a recent Opensignal report. The report demonstrated that Verizon users experienced an average 5G download speed increase of 15.8%, with the share of C-band readings growing from 16.2% to nearly 50%.
“Where we deployed our C-band, we see direct coordination to customer growth on both mobility and fixed wireless access,” Vestberg shared. “We are currently covering [more than] 160 million POPs with C-Band and are on track to deliver 200 million within the first quarter of 2023. C-Band usage is up 170% quarter-over-quarter.”
Looking ahead, Verizon said it continues to expect wireless service revenue growth between 8.5% and 9.5% for 2022 and that it will implement a cost-savings plan to take out between $2 billion and $3 billion in annual expenses by 2025.
