An unusually competitive first quarter of 2025, combined with Verizon putting additional price increases in place, will impact the company’s quarterly churn, but the carrier maintains that its overall strategy on deepening relationships with customers will mean that it meets its guidance for the year.
In a discussion at the NewStreet Research and BCG Future of Connectivity Leaders Conference this week, Verizon Chief Revenue Officer Frank Boulben said that the first quarter of this year has been “an unusual quarter from a competitive intensity standpoint,” with Verizon’s carrier competitors maintaining aggressive promotions longer than is usual. Meanwhile, Verizon putting in place new price increases that will generate additional customer churn.
But those the pricing increases are expected to generate incremental revenue of more than $1 billion. “I’ll do that trade off any day, but it created elevated churn for us in Q1,” Boulben said.
Verizon also expect to see a down-turn in market-wide postpaid growth this year, Boulben explained, going from a combined market size of consumer and business net adds totaling about 9 million per year in the past few years, to between 8 and 8.5 million in 2025. But Boulben said that the carrier will meet its guidance for growth in a shrinking market by focusing on churn reduction.
“The number one driver is going to be churn reduction for us,” Boulben said. He outlined a number of facets to Verizon’s strategy in that area.
–Better personalization of offers. Verizon has been investing in “mass personalization” to make next-best-offer/next-best-service offerings to its customer base, he said.
–Focusing on cross-selling other products, including connected devices and broadband. “Customers who have mobile and broadband with us are churning less, and we see also customers taking more services from us churning less,” Boulben said. In February, Verizon introduced some additional savings and benefits for customers who combine wireless service plus home broadband.
–Plan step-ups within its customer base to increase revenues. Boulben said that 45% of Verizon’s customer base is on a premium plan, but there is still room to migrate customers to its “super-premium” Unlimited Ultimate plan. “We have still a lot of runway on stepping up the base from entry to premium, from premium to super-premium,” he added.
–Continuing C-Band deployments, which result in better churn. Boulben indicated that Verizon continues to see better customer success in markets where it has boosted its network performance and capacity with C-Band spectrum. (Of note: Last year at about this time, Verizon executives on the company’s quarterly call with investors emphasized the differences that they were seeing in markets where Verizon had built out its C-Band coverage, saying that more than 80% of its FWA gross additions in Q1 2024 were in its first 76 C-Band markets and that the carrier sees a higher rate of step-ups to premium service plans in those markets.)
–Use perks to increase customer loyalty. Boulben said that Verizon’s “best kept secret” is that 15% of its wireless service revenue comes from non-connectivity services such as discounted streaming services and other deals—and those revenues are growing by double-digits. He said that last year by October, Verizon had sold its customers 7 million perks at $10 average per perk. By the end of this year, the company expects to exceed 14 million perks sold to customers.
“It’s becoming a business in itself, and it generates good margins,” Boulben said.
