Unlimited data plan resulted in positive net adds.
Verizon Wireless’ recent launch of an unlimited LTE data offer boosted its first quarter customer figures and “positively changed the trajectory of customer additions in the quarter,” the company reported.
Net smartphone additions for the quarter were 49,000, with retail postpaid churn of 1.15% and postpaid phone churn of less than 0.90%, according to Verizon Communications. The carrier cited its move to an unlimited LTE data plan offering as the primary driver for additions, saying that prior to the introduction of unlimited data on February 13, its numbers were down 398,000 phone additions. That figure rose to net adds of 109,000 after it launched the unlimited offering, stemming customer losses.
“Even though Verizon may not have wanted to re-enter this unlimited space, they had to. It is the future. If they didn’t, they would lose market share. It’s as simple as that,” telecom analyst Jeff Kagan wrote at the time of the unlimited data plan launch.
Retail postpaid customers saw a loss of 307,000 customers, driven mostly by a loss of 205,000 tablet subscriptions.
Verizon stock was off nearly 2% in early trading; the company’s revenues and earnings narrowly missed analysts’ expectations.
57% YOY growth in LTE traffic
Verizon’s revenues were down 7.3% year-over-year to $29.8 billion. Capital expenditures for the quarter were down slightly, from $3.4 billion in the first quarter of 2016 to $3.1 billion in the first quarter of 2017. Wireless service revenues were at $15.8 billion, down 6.1% year-over-year; total revenues for wireless were $20.9 billion. Verizon noted that 71% of its postpaid customers are on unsubsidized phone pricing, and that 76% of phone activations in the first quarter went with device payment plans. The carrier reported a 57% year-over-year growth in LTE traffic.
In terms of telematics and IoT, Verizon said that it saw first quarter revenues of $214 million as it integrates its Fleetmatics and Telogis acquisitions.
Verizon is launching 11 pre-commercial “5G” fixed wireless trials in the second quarter.
