Verizon Communications has posted a 23 percent drop in third-quarter profit, as several phone users opted for cheaper plans from rivals AT&T and T-Mobile US.
Verizon lost 189,000 monthly bill-paying phone subscribers in its consumer business in the quarter after the U.S. carrier raised prices for its plans in June through additional charges, which was over and above its already pricier plans.
Verizon revealed that consumer wireless retail postpaid churn was 1.10 percent in third-quarter 2022, and wireless retail postpaid phone churn was 0.88 percent.
In third-quarter 2022, Verizon Consumer business reported 189,000 wireless retail postpaid phone net losses, due to elevated churn partially as a result of recent pricing actions.
Verizon Chairman and CEO Hans Vestberg said: “The pricing actions we took earlier this year, as well as our new cost savings program, show that we are being deliberate and strategic in our decisions to strengthen our business.”
While the company benefited from a 1 percent rise in gross wireless additions (in consumer business) in the quarter, Verizon CFO Matt Ellis told Reuters, but it was offset by “an increase in disconnects as we had some customers disconnect as a result of the pricing actions that we took.”
Verizon added 8,000 net new monthly bill paying wireless phone subscribers in the quarter.
Telecom operators are under pressure to keep their plans affordable as rising cost of living crimps discretionary spending by customers.
That coupled with costs due to heavy investment in 5G technology and rising competition to retain high-paying subscribers has hurt Verizon, which has been adding fewer subscribers than its rivals.
The carrier’s net income for the quarter fell 23.3 percent to $5 billion. Total revenue, however, rose 4 percent to $34.2 billion, Verizon said.