Verizon Wireless struggles through poor first quarter

Verizon Wireless struggles through poor first quarter
Verizon Wireless had a poor first quarter. Things were so bad for the nation's largest carrier, that the number of new postpaid contract accounts plunged by 67% from the prior year's quarter. For the first time ever, the company was forced to rely on the lower paying pre-paid customers brought in by resellers to make up for the drop in customers signing contracts. And while 1.5 million new customers were added in the three months, bringing Verizon's leading total to 92.8 million (AT&T is second), 1.3 million of those came from resellers such as TracFone that offer discounted services to students and those facing belt tightening during times of economic woes. Because those accounts bring in fewer dollars, as Bernstein analyst Craig Moffet puts it, "The pressing question, of course, is whether these gains are beginning to cannibalize Verizon's far more lucrative post-paid business." For the first quarter, Verizon Wireless added just 423,000 new customers on contract. The average Verizon mobile customer spent $50.95 monthly, the same as last year. Churn was 1.07% and while Big Red usually has the lowest such figure among U.S. carriers, the number for the last quarter matched the churn rate produced by AT&T. The numbers might pick up next quarter as Verizon is expected to launch the HTC Droid Incredible, its latest Android model. The handset has been the recipient of outstanding reviews with many calling it the best Android cellphone currently available.

source: WSJ, NYTimes

FEATURED VIDEO

81 Comments

68. tallica05

Posts: 93; Member since: Dec 26, 2009

I think VZW should stop focusing on new customers and work on keeping the ones they got. basically raise NE2 back to 100.00. more customers are leaving cause they can get the iconic phone for the same price in their heads so they leave. thats where they need to say hey lets keep our current customers and work on bringing in new ones. but the long time customer needs to be mor appreciated then 50.00 ne2 and the option to get used phones if they threaten to leave. I love VZW and ill be there fir life but focus on us and them. not just out with the old in with the new

69. remixfa

Posts: 14605; Member since: Dec 19, 2008

not all companies give you an upgrade discount tallica. Tmobile sure doesnt. u get an 18 fee and contract pricing.. no extra discounts. of course, u pay about 1k less over 2 years, so ur still ahead, but i digress.

79. iHateCrapple

Posts: 734; Member since: Feb 12, 2010

Stop bitching tallica, consider yourself lucky to get a discount at all. Sprint charges ACTIVATION FEES for existing upgrade customers...So basically they charge you extra for STAYING with them. Talk about being appreciated huh?!?!

61. networkdood

Posts: 6330; Member since: Mar 31, 2010

Remaxfa - not sure where you get your numbers - but AT&T did 500k+ postpaid net subscriber gain in 1Q - Verizon did around under 250k.... Either way, people are dumb to rah rah about a company that cares nothing about them except as a number. I do not care who the carrier is - just have the phone I want...and decent coverage...

60. remixfa

Posts: 14605; Member since: Dec 19, 2008

what i think is the most fun is phone arena itself. It paints this picture of ATT having such a great quarter compared to VZW. The bias is in the writing. ATT did LESS THAN 100k more POST PAID customers than VZW. Thats all that really counts.. not "iphones activated" since most were upgrades, and not all the prepaid crap because its not long term growth. All both companies want is postpaid contracts. In that sence, ATT won, but it wasnt by much. Less than 100k in postpaid contracts might as well be a statistical tie concidering the amount of subscribers the companies have. They mention the fact that ATT had to pay out under a billion in new taxes to the obama fund, but dont even mention that VZW actually paid more since its the bigger company. Oh, and BTW, for any idiot obama/health care supporters out there... who do you think is really gonna foot all these new taxes? ATT and the rest.. or do you think they are gonna pass it down to the consumers? If you guessed YOU, the consumer, YOUR CORRECT! So for those of you that are bitching for them to lower their rates and other crap and yet voted for Obama, u cant have it both ways.

78. Whateverman

Posts: 3295; Member since: May 17, 2009

Why are you trying to tie our phone rates to the cost of health insurance? That didn't hurt AT&T or Verizon to the point that you have to come to phonearean and start lying about taxing poor billionaires and their companies to the brink of starvation or killing grandma with death panels. You wanna argue about that, pick another forum. And don't bother responding with that typical, "Oh, your a communist, marxist, socialist just like Obama." reply that most republicans give if you don't agree with every word they say. You have the rights to disagree with his policies, but we're talking about PHONES in this forum. Leave the politics on Fox News forum.

50. tflex

Posts: 146; Member since: Oct 24, 2008

Verizon users/fans needed to hear this. This is proof that even the almighty and flawless VZW can lose money just like Att, Sprint, etc... I always saw comments poking fun at the fact of Sprint losing money as if it were a good thing??!!!! It can happen to any carrier, or any business in the world for that matter..

66. rb68

Posts: 27; Member since: Apr 23, 2010

Where does it say there was a loss? iPhoneArena hyperbole aside, VZW reported positive revenue.

77. PapaJay224

Posts: 866; Member since: Feb 08, 2009

+1 rb68 , exactly! people are missing the point, There was no LOSS here there just wasn't as much gain. Ive been reading all of these retarded comments about whos dick is bigger. Maybe VZW had different focuses on LTE and thats why customer bases slowed down, how is that BAD? Also AT&T is behind it would be shameful for them NOT to pull in better number, they have a lot of catching up to do. I'm not sure people really understand how to read what these quarterly results could mean internally.

48. mobileguy123

Posts: 6; Member since: Jul 08, 2009

ok well this is realy funny. but first of all let me say this before you people start calling me a fanboy and talk your bs. i dont have ATT or VERIZON n i couldnt care any less about them but i see most of u are hard die fanboys of either one. here your fightin talkin shit about numbers and coverage and number#1. well its kinda stupid for you VERIZON fanboys to talk shit about atts bad coverage because aint it fuked up that with wut u guys call bad coverage they still manage to get more customers and more money??? lol imagine if they did have a network like verizon. what would u say then?? imagine if with this coverage they do those numbers, how bad would they b kicking Big Reds ass lol. now att yeah atleast half of their new costumers every quarter are people activating iphones. so thats something you gotta look at. even if the worst company was to get the iphone they would gain 2 times the costumers they usualy get every quarter. its not because att is good its because of the phone. unfortunately no company is perfect they all lack something. some have great coverage (VERIZON) some have great speeds (ATT 7.2 mbps,T-mobile upgrading to 21mbps) and phones (att iphone,tmobile HD2) and some have great prices (sprint, t-mobile) but theres not a single company that offers all the qualities. so you choose whats realy more important to you. I HAVE T-MOBILE. why??? well i live in HOUSTON we have great coverage here i rarely leave houston, they have great affordable plans and a very nice selection of phones (HD2). so its realy what works for you and what you realy want.

40. wade1968

Posts: 224; Member since: Apr 12, 2010

oh im tired of hearing how the giant companys are losing money. i'll say this if straight talk or boost mobile starts getting cool phones at&t,verizon,sprint, and t-mobile are all going to lose more money cause they wont even try a 45 dollar a month all everything plan. and before you yell at me i know boost runs on sprint and straight talk runs on verizon which also make u wonder why more people dont say screw it i'll pay 45 to 50 dollars a month for everything instead of 130.

63. whocares

Posts: 235; Member since: Dec 19, 2009

Lol whos towers do you think they are using?

71. wade1968

Posts: 224; Member since: Apr 12, 2010

plz read full statement before commenting ty :)

80. whocares

Posts: 235; Member since: Dec 19, 2009

Yeah I stopped after the second sentence. But you pretty much answered yourself. If they start losing too much business I doubt theyll sit there and let it happen.

37. scottmbolt unregistered

You all need to stfu and stop bitching.

44. vzwtechbill

Posts: 175; Member since: Mar 16, 2009

Scott, majority of folks that visit this site only do it to troll, and prob work for particular carriers. If they wanted news, they'd go to engadgetmobile. Did you miss the memo that iphonearena is for flaming and trolling only? lol

27. networkdood

Posts: 6330; Member since: Mar 31, 2010

LOL, wow - Verizon and AT&T are virtually identical in terms of billing. My wife went from one to the other and dropped the GPS and saved a little money. Verizon was smart to exploit the network aspect. Issues in NY state are improving. Issues in San Francisco are not due to zoning issues......someday it will all work. Works great where I travel on the west coast. Of course, I installed a different radio version then what the original TILT came with. Check out XDA on how to unlock phones, super-cid unlock phones, and install different radio software to see which works in your area better. I agree, AT&T lacks after BB BOLD and IPHONE - the moto BACKFLIP is a weak ANDROID phone....dude, maybe they get a DELL??

36. Mateo8326

Posts: 472; Member since: Jul 15, 2009

yeah the backflip is pretty weak if you compair them to the phones on this site, but its a good phone for your average consumer

21. Mateo8326

Posts: 472; Member since: Jul 15, 2009

Wow congrats Verizon i guess all those bashing ATT commericals really paid off in the end. Plus i think ATT will blow up when the new iphone launches especially if they are working on their network as well too.

17. jrcrow79

Posts: 477; Member since: May 02, 2008

ATT better get some more good droid phones ASAP..vzw!...you get what you deserve for nickel n diming your customers!

15. networkdood

Posts: 6330; Member since: Mar 31, 2010

AT&T did fine - phone arena's article mentioned the 1billion dollar hit for health care costs - an extra expense that did dappen the news some - Verizon does not have 100 million customer - yet. Verizon, even with the DROID only gained about 250k postpaid customers vs over 500k postapid for AT&T. That will improve, but it stunk (for big red) - things will get better going forward - especially with the INCREDIBLE. 92.8 million vs 87 million - the difference is that ALLTEL acquisition...smart move. Meanwhile, Verizon dumps its landline operation onto another company who then folds....AT&T made gains in landline and will eventually surpass FIOS in total subscribers with UVERSE. While DSL continues to have (VERIZON stopped its investment, while AT&T keeps chugging) well over 90% attach rate...AT&T had a banner 1Q in its history (of current existence)...check out this link for more info: http://insider.web.att.com/s/editorial.dll?pnum=1&bfromind=4817&eeid=6223997&_sitecat=1649&dcatid=0 &eetype=article&render=y&ac=-2&ch=&s=&cat=&_lid=140&_lnm=empnet+home+storylink

13. aclsmb

Posts: 18; Member since: Sep 03, 2009

I think all the 4 major carriers should drop their smartphone plan rates by at least $10.00 a month and ideally $20.00 a month. I bet they'd see a lot more sign ups.

32. YouLostTheGame

Posts: 441; Member since: Dec 11, 2008

Yeah, and with those sign ups, an ass-load of network congestion, that would make owning a smartphone a waste of time and money. Don't hate cuz you want a smartphone, but can't afford one. Price is set by supply and demand, basic economic principles.

42. vzwtechbill

Posts: 175; Member since: Mar 16, 2009

+1

43. vzwtechbill

Posts: 175; Member since: Mar 16, 2009

that +1 was for YouLostTheGame, won't let me edit to delet.

62. whocares

Posts: 235; Member since: Dec 19, 2009

They should join forces with tmobiles prices at&ts speed and verizons coverage. and sprints... uh... colors!

10. warhed

Posts: 56; Member since: Mar 07, 2010

Great, now their gonna nickel & dime us even more! Att had a better quarter because they are taking in revenues from non-phone devices (ipad)... soon, att will more up as well for sprint & T-Mobile, while vzw will stay stagnant....

12. JackFace

Posts: 190; Member since: Nov 03, 2009

Pretty sure the iPad 3G is not even released yet. WTF are you talking about saying AT&T is making money off the iPads??? That's all Apple until the 3G is released.

18. Mateo8326

Posts: 472; Member since: Jul 15, 2009

ATT making money from the network portions duh

23. JackFace

Posts: 190; Member since: Nov 03, 2009

Mateo... The iPad 3G has NOT been released yet... Therefore, AT&T has not been collecting revenue from the 3G service. The current iPads only support WiFi... no charge whatsoever... AT&T has mad no money off of the iPad at all... yet. Damn people, get a clue!

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.
FCC OKs Cingular's purchase of AT&T Wireless