Verizon Continues to Win Wireless Subscribers -- Update
October 19 2017 - 12:49PM
Dow Jones News
By Austen Hufford and Ryan Knutson
Boring is good when you're the largest wireless carrier in the
country.
Buoyed by soft promotions around the latest iPhone, Verizon
Communications Inc. boosted revenue and its subscriber rolls in the
third quarter, a sign the carrier's return to unlimited data plans
earlier this year has staunched customer defections.
Verizon added 603,000 monthly postpaid connections in the
quarter, nearly double what Wall Street expected. The company had
115.3 million total wireless retail connections, up from 113.7
million the same quarter last year and 114.5 million in the second
quarter.
Verizon shares rose 2.2% to $49.73 in midday trading Thursday
but are down about 7% on the year.
After losing customers during the first three months of the
year, Verizon in February brought back unlimited wireless plans for
the first time since 2011. The unlimited plans allow customers pay
a flat rate for nearly unlimited monthly internet usage on their
smartphones.
The move exacerbated revenue declines in Verizon's wireless
unit, as many customers on older, more expensive plans quickly
switched over to the cheaper unlimited option. That trend is
slowing as customers on plans with data caps are now starting to
pay up for unlimited data, the company said. While revenue from the
wireless business, its largest unit, fell 2.4% to $21.58 billion,
the company said the declines were bottoming out.
"We knew initially we would see optimizers who had the
opportunity to move to unlimited and save money," said Verizon
finance chief Matt Ellis on a call Thursday with analysts.
Wireless-service revenue increased sequentially for the first time
in three years.
Verizon's subscriber metrics also benefited from weaker
promotions around Apple Inc.'s latest iPhone. But heavier
competition could arrive during the last three months of the year,
analysts warned, as the flagship iPhone X goes on sale in November,
just in time for the holiday season.
Verizon said wearable devices, such as watches, made up a
significant portion of its 238,000 connected device additions in
the quarter -- an indication that Apple's new LTE connected
smartwatch is off to a decent start.
Revenue at the wireline segment that includes its Fios internet
and television service increased 1.1% to $7.66 billion, boosted by
its acquisition of XO Communications, which owned fiber-optic
networks.
Verizon cited ongoing consumer shifts to over-the-top video
options and away from traditional television as the reason for
losing 18,000 Fios video customers in the quarter. That is more
that the loss of 15,000 in the second quarter and 13,000 in the
first quarter. It gained 36,000 in the third quarter last year. It
ended the quarter with 4.6 million Fios video customers.
In all, Verizon profit was the same as the third quarter last
year, with net income of $3.62 billion, or 89 cents a share.
Revenue rose 2.5% to $31.72 billion. Still, excluding acquisitions
and divestitures, adjusted revenue fell 2.3%.
Verizon expects capital spending for 2017 to be at the lower end
of its $16.8 billion to $17.5 billion range.
Write to Austen Hufford at austen.hufford@wsj.com and Ryan
Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
October 19, 2017 12:34 ET (16:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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