Verizon today turned in financial results of a nightmare first quarter of 2017 that saw the nation's top wireless carrier shed more than 300,000 postpaid subscribers.
This marks the first time Verizon has ever recorded a net loss in customer subscriptions at the end of a quarter, an ominous sign for a telco that has made wireless the focal point of its business plan. For the three months to March 31, Verizon's figures look like this:
- Revenues of $29.8bn were down 7.3 per cent from Q1 2016. Analysts expected about $30.5bn, so that's a double letdown.
- Net income was $3.55bn, a 20 per cent decline from last year's quarter.
- Earnings per share of $0.95 were short of the $0.98 analyst estimates.
- Wireless revenues were $20.9bn, down 5 per cent year-over-year.
- Wireline revenues were $7.9bn, down 0.6 per cent from Q1 2016.
While the loss of 307,000 postpaid subscribers will hardly put a dent in the total base of 108 million subscribers that Verizon has, the loss is highly significant in that it is the first time Verizon has ever seen a net drop in subscribers.
Most of the drop came in the weeks before Verizon introduced its "unlimited" data plan. Verizon estimates at one point it was down 398,000 customers before the unlimited offer brought in more subscribers.
By comparison, competitor AT&T reported that it added 400,000 postpaid subscriptions in its last quarter, while the surging T‑Mobile US said it added 1.2 million.
T‑Mobile USA CEO John Legere took the Verizon news in his usual form:
The bad news comes as Verizon prepares to take on the weight of Yahoo! as part of its content network. The two companies are set to tie up their merger in the coming months and Yahoo! will be united with fellow one-time internet giant Aol under the Verizon network banner. ®