Verizon Adds Wireless Customers but Profit Slips
August 01 2019 - 8:17AM
Dow Jones News
By Sarah Krouse
Verizon Communications Inc. added more wireless customers in the
second quarter than some analysts expected as the carrier stepped
up its promotions and pushed to bring faster 5G wireless service to
more cities.
The carrier said it added 245,000 net postpaid phone connections
during the period compared with the 199,000 such connections it
added during the same period last year.
JPMorgan Chase & Co. analysts said earlier this week that
they expected Verizon to top their expectation that it would add
175,000 postpaid phone connections during the second quarter after
the carrier made a marketing push.
Verizon's earnings come nearly a week after rival T-Mobile US
Inc. received approval from federal antitrust officials to merge
with Sprint.
The union of T-Mobile and Sprint, years in the making, would
create a wireless company closer to the size of Verizon and
AT&T Inc. The merger still faces further challenges from a
state lawsuit seeking to block it.
T-Mobile said last week it added 710,000 net postpaid phone
customers in the second quarter, while AT&T's wireless business
added 72,000 during the period. Postpaid customers are considered
lucrative for carriers because they pay their bill monthly under
longer-term contracts.
Verizon has put upgrading its network to 5G at the heart of its
corporate strategy and is working to identify the best ways to
generate fresh revenue from businesses and consumers alike.
Earlier this week it turned on the faster service in parts of
Washington, Indianapolis, Atlanta and Detroit. To date, Verizon's
5G signal in cities like Chicago has been ultrafast but spotty in
part because it uses high-frequency airwaves that don't travel long
distances.
Verizon executives have said it would take years for the network
upgrades to bring in more revenue. The carrier has said it would
eventually charge $10 a month for the service, but is currently
waiving that charge for new 5G customers.
Its 4G service, meanwhile, faces competition for subscribers in
the saturated U.S. market. Verizon is trying to draw new customers
and upgrade existing customers to pricier tiers of its unlimited
data plans.
Verizon had 118.12 million wireless connections, including
tablets, smartwatches and other devices, at the end of June,
compared with 117.9 million at the end of March.
Hans Vestberg, Verizon's chief executive, has restructured the
company by the type of customer served, rather than the product
sold. The move could help de-emphasize legacy products like Fios
video, which has lost customers in recent years. That service lost
another 52,000 customers in the second quarter.
Overall, net income attributable to Verizon was $3.9 billion,
down from $4.1 billion a year earlier. Quarterly revenue declined
slightly to $32.1 billion from $32.2 billion a year ago.
Revenue within Verizon's media unit, which includes the Yahoo
and AOL properties it acquired, was $1.8 billion, down 2.9% from a
year ago. The company said declines in desktop advertising revenue
continue to be a challenge.
The carrier is in the throes of an effort to cut $10 billion in
costs by 2021 and says it has cut $4.1 billion to date.
Verizon shares were up about 1% to $53 in premarket trading.
Write to Sarah Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
August 01, 2019 08:02 ET (12:02 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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