Verizon posts fewer first-quarter subscriber losses on flexible plan demand

By Thomson Reuters Apr 22, 2024 | 6:07 AM

(Reuters) – Verizon Communications said on Monday it lost fewer-than-expected wireless subscribers in the first quarter thanks to its flexible plans and streaming bundles offering discounted pricing for services such as Netflix and Warner Bros Discovery’s Max.

Shares of the company were up 2.5% in premarket trading.

The U.S. telecom firm lost 68,000 monthly bill-paying wireless phone subscribers between January and March, which is a seasonally softer period for the industry after the holiday quarter.

That compared with an estimated loss of 100,000 expected by eight analysts polled by FactSet and a loss of 127,000 in the first quarter of 2023.

The New York-based company said last month that a majority of its customers were opting for its premium, customizable myPlan option, which has resonated well with consumers.

It announced its latest promotional offerings for myPlan – with six months of a Disney bundle free for new and existing customers on selected unlimited plans – starting last Thursday.

In December, Verizon began offering discounted subscriptions to Netflix and Warner Bros Discovery’s Max streaming service with some myPlan bundles.

The firm reported total revenue of $33 billion in the three months to March, compared to an LSEG estimate of $33.24 billion, as phone upgrade levels continue to drift lower.

Customers are showing a clear preference for holding onto their phones for longer periods amid economic uncertainty and a lack of major new features, analysts have said.

Verizon’s plans normally cost more than rivals such as AT&T and T-Mobile, which are scheduled to report earnings later in the week.

Its consumer business reported 158,000 wireless retail postpaid phone net losses, compared to 263,000 losses a year ago, marking the best first-quarter performance for the unit since 2018.

Free cash flow, a metric that helps determine dividend payouts, was $2.7 billion, below the $3.6 billion estimated by Visible Alpha.

(Reporting by Harshita Mary Varghese; Editing by Pooja Desai)