Subscribers: Verizon saw an overall net decline of 307,000 retail postpaid customers during the quarter, and its 289,000 net postpaid phone losses were far worse than the loss of 100,000 customers predicted by Wells Fargo Securities.
In February, Verizon announced that it would offer an unlimited data plan for the first time in more than five years, following which other companies sweetened their unlimited offerings.
The company has pursued revenue streams outside its core wireless business, including a $4.48 billion deal for Yahoo Inc's core business.
The industry's bruising price war has been a boon to consumers.
Wireline revenue declined 0.6% to $7.9 billion.
Delia Brown, a nurse's assistant in Sandusky, Ohio, upgraded three of her Verizon phone lines to unlimited data and her monthly bill dropped more than $40.
Rival AT&T Inc. has diversified with its acquisition of DirecTV and proposed purchase of media giant Time Warner Inc. But Verizon doubled down in 2014 with its $130 billion purchase of Vodafone Group PLC's 45% stake in their Verizon Wireless joint venture. It also offered insights into both wireless and wireline users, as well as projections and expectations for the full year results.
". if there is the right opportunity out there to accelerate [Verizon's] strategy organically in a way that adds shareholder value, we're always looking at those opportunities", Verizon Chief Financial Officer Matthew Ellis explained McAdam's comments in a conference call Thursday. T-Mobile was also limiting the quality of streaming video unless customers paid extra but added HD video to its base $70 plan in response to Verizon's unlimited plan.
The telecom giant's much-talked-about acquisition of Marissa Mayer 's Yahoo (YHOO) is still pending, complicated by the two data breaches that Yahoo announced previous year, which affected up to 1.5 billion users throughout 2013 and 2014. The company had been on pace to lose almost 400,000 customers during the quarter, CFO Matt Ellis said this morning, but the new plan helped the company stanch the bleeding. Verizon's 2017 effective tax rate should fall within a range of 34 to 36 percent, the company said, which would exclude any impacts from the Trump administration's potential tax reform.
Verizon's quarterly subscriber loss was the first of its so-called postpaid wireless customers in the company's history.
Much of the pain Verizon is going through began as a result of moves T-Mobile began making in 2013, such as ending two year contracts and canceling overage fees. The New York company says it would have lost even more customers if it didn't launch its unlimited cellphone plan in February. But that stands to leave Verizon in a familiar position: slowing growth on the top and bottom lines, and a sliding stock price.
"They badly missed on every important subscriber metric, and it just underscores that the wireless business is a severely growth-challenged business at the moment", said Craig Moffett, an analyst at MoffettNathanson in an interview.Net income attributable to Verizon fell to US$3.45 billion, or 84 cents per share, in the first quarter ended March 31, from US$4.31 billion, or US$1.06 per share, a year earlier. The cell phone carrier reported $0.95 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.98 by $0.03.
Total operating revenue fell to $29.81 billion for the fourth straight quarter from $32.17 billion a year earlier.