Verizon reports 20% decline in profits, as unlimited plans prevent steeper wireless losses
Verizon Communications’ quarterly profits fell by nearly 20 percent in the first quarter, to $3.5 billion, as the company’s wireless business reported a decline of more than 300,000 postpaid phone subscribers, the coveted class of customers on lucrative monthly wireless plans.
The New York-based telecom giant said the decline in wireless subscribers would have been steeper had it not brought back unlimited data plans in February, a move that brought its offerings more in line with smaller rivals AT&T, Sprint and T-Mobile.
Here’s how the company explains the impact of the unlimited plan in its earnings report.
The launch of Verizon Unlimited positively changed the trajectory of customer additions in the quarter. A net decline of 307,000 retail postpaid connections in first-quarter 2017 included 289,000 phone losses. Prior to the launch in mid-February, Verizon had a retail postpaid phone net loss of 398,000; after the launch, Verizon added 109,000 retail postpaid phone connections. For the entire quarter, Verizon added a net of 49,000 smartphones to its retail postpaid phone base.
Verizon Chairman and CEO Lowell McAdam said in a statement, “Our first-quarter results again demonstrated that customers value a high-quality network experience. To build on our loyal customer base and the third-party recognition we have received for network leadership, we extended our wireless and fiber network capabilities, began offering an unlimited pricing option and expanded our opportunities in new markets. We’re executing on strategies to capture future growth and create long-term shareholder value.”
Verizon is in the process of acquiring Yahoo, which said this week that it expects the revised $4.48 billion deal to be completed in June. Separately, McAdam said this week that Verizon is open to potential merger talks with other corporate giants such as Comcast or Disney.
T-Mobile, the Bellevue, Wash.-based wireless company, has been steadily adding subscribers in recent years, led by outspoken CEO John Legere. T-Mobile poked at Verizon yet again this morning with a public-relations stunt tied to Verizon’s earnings release on 4/20.