Verizon’s First Quarter Report: Subscriber Losses Despite Strategic Moves

Verizon Communications has unveiled a mixed bag of results during the first-quarter, showcasing both gains and losses across various metrics.
Verizon revenue Q1 2024Despite strategic efforts to attract customers with flexible plans and streaming bundles, the telecoms giant experienced a setback in subscriber numbers.

Between January and March of 2024, Verizon witnessed a decline of 68,000 phone subscribers, despite its aim to attract customers through innovative offerings such as discounted pricing for services like Netflix and Warner Bros Discovery’s Max. While the company’s premium customizable myPlan option garnered positive consumer feedback, it couldn’t fully offset the loss in subscriber base.

One of Verizon’s key strategies involved forging partnerships with leading streaming services. In its latest promotional move, the company began offering six months of complimentary access to Disney’s services to both new and existing customers on select plans, starting last Thursday. This followed December’s initiative to provide discounted subscriptions to Netflix and Max as part of myPlan bundles.

Nevertheless, amidst the subscriber decline, Verizon’s consumer business achieved its strongest first-quarter performance since 2018. The company reported 158,000 wireless retail postpaid phone net losses, a notable improvement from the 263,000 losses recorded a year prior.

CEO Hans Vestberg expressed optimism, stating, “We are on track to meet our financial guidance and to deliver positive consumer postpaid phone net adds for the year.”

Comparatively, Verizon’s pricing structure tends to be higher than that of rivals like AT&T and T-Mobile, both of which are slated to release their earnings reports later in the week, Reuters news report said.

Financially, Verizon’s first-quarter capital expenditures totaled $4.4 billion, a decrease from $6.0 billion in the same period of the previous year. The company didn’t disclose specific figures for 5G subscribers. Verizon did not reveal the reason for significant drop in its Capex.

CAPEX

Verizon reported operating revenue of $33.0 billion, marking a marginal increase of 0.2 percent. This growth was attributed to recent pricing adjustments and improved operating results, albeit offset by a decline in wireless equipment revenue due to reduced upgrade volumes.

REVENUE

Net income for the quarter amounted to $4.7 billion, down from $5.0 billion. Wireless service revenue saw a 3.3 percent increase, totaling $19.5 billion, driven by pricing actions and higher adoption rates of premium price plans and fixed wireless services.

In terms of business segments, Verizon’s Consumer revenue reached $25.1 billion, marking an increase of 0.8 percent. Similarly, Wireless service revenue climbed by 3.4 percent to $16.1 billion, propelled by growth in Consumer wireless postpaid average revenue per account (ARPA) and fixed wireless access (FWA) adoption.

However, Verizon’s Business revenue witnessed a slight decline of 1.6 percent, totaling $7.4 billion. Despite this, Business wireless service revenue saw a modest uptick of 2.7 percent, driven by net additions in both mobility and fixed wireless sectors during the quarter.

Baburajan Kizhakedath