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Verizon Experiences Year-Over-Year Drop In Connection Growth For Q3


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For the longest time, Verizon Wireless has been consistent with its quarterly results, especially in terms of the growth of connections. But in the most recent quarter, the industry leader seems to be feeling the pressure at last. For Q3, the Big Red registered 525,000 net direct connection additions, which represents only less than half of the 1.2 million connections it had added during the third quarter of last year. The carrier also only managed to generate just 442,000 postpaid connections in the third quarter, a number that failed to meet projections by analysts. Interestingly, Verizon was able to record 83,000 net connection additions for its branded prepaid service, which had suffered losses in the last few quarters.

Verizon’s postpaid numbers for the third quarter may have been impacted by recent aggressive efforts by its rivals (such as T-Mobile and Sprint) in offering “unlimited” deals and promos. The Big Red’s unwillingness to match those efforts may have contributed in its year-over-year decline in postpaid connection growth. As for T-Mobile and Sprint, both have already reported their quarterly results, and their postpaid numbers look good.

T-Mobile, for instance, registered over 750,000 branded postpaid net phone additions and 650,000 net prepaid customer additions. T-Mobile claims that it had taken away over 250,000 customers from Verizon by mid-September, while also grabbing almost 400,000 customers from AT&T and close to 300,000 customers from Sprint. Sprint, on the other hand, reported that it gained 740,000 net connection additions during the third quarter, with 344,000 of them postpaid net additions, easily doubling its postpaid connection numbers compared to the previous quarter and over five times compared to the same quarter last year.

Verizon Wireless also saw its customer turnover rate get worse from 1.21 percent last year to 1.28 percent this year. Various industry watchers attribute this increase to tablet devices.

Earnings-wise, the carrier’s wireless service revenue dropped 3.9 percent year-over-year to $22.1 billion. For Q3, Verizon’s wireless services accounted for 71.5 percent of its overall revenue; last year it was 69.3 percent. The carrier also posted an operating income of $7.6 billion, and an operating income margin of 34.6 percent (improving from the 33.3 percent it logged last year).

Still, the Big Red ended the third quarter with 113.7 million branded connections, which remains the largest among the Big Four carriers in the United States.


Source: RCRWireless

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6 comments:

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  1. They gonna be 4th and at&t 3rd they can't match the other companies

    ReplyDelete
    Replies
    1. .....by 2080 or so?

      They are so far ahead of the other companies now.

      Delete
  2. This is great news. Perhaps now Verizon will actually try to compete.

    ReplyDelete
  3. It will be a long time before tmobile catches att, let alone vz. Sprint... Lol

    ReplyDelete
    Replies
    1. The way things are now, it would be decades. As T-Mobile's network is no where near as good as Verizon and AT&T.

      If it finally catches up, things will be a lot different.

      Delete
  4. If you build it, (network), they will come. The map is only so big, and everyone is gunning for Evil Big Red!

    ReplyDelete
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