The telecommunication giant that was once the US’s number one mobile and cheap residential phone service provider, is facing trouble in its paradise. For the very first time, the top US wireless carrier has faced a terrible fall in its profits and has lost a significant amount of its wireless customers.
Let’s have a closer look at the matter.
Verizon Loses Wireless Customers in the First Quarter of 2017
The loss of the subscribers being faced by Verizon in the first quarter of 2017 has been posted by the wireless carrier, showing how its rivals have impacted its growth.
The mobile and wireless landline telephone service provider had been facing this swell of competition from the telecommunication rivals like T-Mobile and Sprint. And amidst the competition and price wars, Verizon reintroduced its Unlimited Data Plan in the month of February.
Previously, the unlimited data plan by Verizon was stopped in the 2011 but, seeing a rapid fall in their mobile and wireless subscribers, the company chose to bring it back.
Apparently, that wasn’t enough, leading Verizon to lose a total of around 307,000 postpaid subscribers for its retail wireless services. All of this, just in the first three months of the year.
The turn of events for the biggest mobile and cheap residential phone service provider is proving to be a setback. And the statement is backed by the fact that the Verizon stock was 1.5% lower on Thursday.
For Verizon, losing subscribers on a quarterly basis is not a new scenario as the telecom industry leader has always been known to report finacial growth, regardless of the loss of subscribers. But the number of lost wireless subscribers this time is quite big!
The Impact of Competitors
Such a huge loss of customers is being faced by the leading wireless landline telephone service provider because of the shift of its subscribers to its rivals.
As per the latest earnings report, the Verizon subscribers have been fleeing to its competing companies – T-Mobile and Sprint.
The demand for new wireless service is already quite low in the market as most people have mobile phones now. Thus, there is less opportunity for the cheap residential phone service providers to make profit on bringing new subscribers into the market.
Also, with the previously raging ‘Unlimited Data Plan’ war among the competing telecommunication companies, the service providers had to give unlimited wireless services, including data.
With the unlimited plans, the wireless landline telephone service providers cannot generate any fees for overages of data as was the case with the non-unlimited plans. Thus, there is less revenue generated through these plans.
To top it, the small competitors of the telecom behemoths like Verizon often offer cheaper plans to subscribers which usually lures them to switch.
All these events took a great toll on Verizon’s profits and subscribers.
Verizon, a leqading mobile and landline telephone service provider is going through a rough patch! But the company is surely not going to sit back and will come up with new plans, offers, and pricing to bring their subscribers back!
Stating to the matter, Matt Ellis, the Chief Financial Officer of Verizon said, “We’re confident in executing our strategy organically, but if there’s the right opportunity out there to accelerate the strategy inorganically in a way that adds shareholder value, we’re always looking at those opportunities”
So, let’s hope for the best from Verizon!