Verizon's decision in recent years to give away free tablets as a way to juice subscriber numbers is also coming back to haunt it, as numerous customers who signed up for two-year data plans in exchange for a free tablet aren't renewing their subscriptions.
In the first six weeks of the year, Verizon lost almost 400,000 wireless customers, according to its latest earnings report. Verizon's unlimited plans are more expensive than options from Sprint and T-Mobile, but Verizon has a better network. That compares with 640,000 retail postpaid net additions in the year-ago period, including 8,000 phone losses. But after quarters of slowing subscriber growth, and with a new head of wireless and chief financial officer in the fold, the phone giant went on the offensive in mid-February.
Verizon reported its first quarter earnings report today. This in turn affected its financials - the company experienced a decline of 5.1% in its wireless business revenue.
Verizon has been struggling to fend off smaller rivals T-Mobile US Inc TMUS.O and Sprint Corp S.N in a maturing market for USA wireless service, and in February offered an unlimited data plan for the first time in more than five years.
After Verizon rolled out its plan, however, it saw 109,000 retail postpaid phone connections, a significant turnaround. Verizon's churn increased from 1.03 to 1.15 percent of all customers in the first quarter, a strong sign that the race-to-the-bottom between the carriers is starting to see results.More news: International Monetary Fund ups forecast for Kazakhstan's GDP growth
Verizon has been able to retain customers thanks to its high-quality network.
Industry analysts have questioned whether the company will pursue a more transformative deal as its main competitor AT&T seeks to diversify its business through a planned acquisition of Time Warner.
Verizon Communications (VZ) reported first-quarter earnings and sales on Thursday that missed analysts' expectations, sending shares lower. Hoping to make money by mining and selling customer data, Verizon has moved to purchase AOL and Yahoo for billions of dollars. The telecom company said it added a net of 35,000 Fios internet connections, missing quarterly estimates, and it lost a net of 13,000 Fios video connections for the period. They led us to believe that the EPS would be 96 cents per share on revenue of $30.5 billion.
Shares of the No. 1 United States wireless carrier fell 1.7 percent to $48.10 in premarket trading.
On Thursday, the company predicted its full-year 2017 sales to be "fairly consistent" with those in 2016, with improvements being made in wireless service revenue and equipment revenue trends. Something seems to have changed in 2017, though, as the company just reported what may be their worst quarter ever, a quarter that was actually on pace to be even worse if not for the introduction of Verizon Unlimited.