Verizon Faces Subscriber Growth Challenges Amid Price Hikes
Verizon's recent quarter reveals soft subscriber growth due to rising competition and increased pricing, impacting customer upgrade cycles and revenue projections.
Highlights
- Verizon warns of soft subscriber growth following a challenging quarter.
- Increased competition and price adjustments cited as key factors.
- Customers are extending device upgrade intervals, now averaging over 41 months.
- Price increases expected to boost service revenue by over $1 billion in the current year.
Shares of Verizon (VZ) experienced a decline after the company signaled subdued subscriber growth prospects. Chief Revenue Officer Frank Boulben highlighted intensified market competition and the effects of recent price hikes as primary contributors to this trend.
The company anticipates that gross new subscriber additions in the first quarter will remain flat or slightly decrease compared to the previous year, as detailed in their regulatory filings. Price adjustments implemented in early 2025 include increased rates for customers with multiple phone lines and older plans, alongside administrative fee hikes and upcoming changes to multi-device protection plans.
Verizon also noted a shift in customer behavior, with users delaying device upgrades longer than in past years. The average retention period for devices has extended beyond 41 months, reflecting cautious spending amid higher service costs.
Despite these challenges, Verizon projects that the recent price increases will generate more than $1 billion in additional service revenue throughout the year. The company expects wireless service revenue growth between 2% and 2.8% and anticipates reduced customer churn in 2025 compared to 2024. Investors await the first-quarter earnings report scheduled for April 22.
Following the announcement, Verizon’s stock price dropped approximately 7% during intraday trading but remains up 8% since the start of 2025.
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