Unlimited Data Changes Verizon Customer Addition Trajectory

Verizon’s launch of unlimited mobile data plans definitely showed that when the price of a desired commodity is lowered, demand goes up.

“The launch of Verizon Unlimited positively changed the trajectory of customer additions in the quarter,” Verizon says. The new plan lead to a net decline of 307,000 retail postpaid connections in first-quarter 2017 included 289,000 phone losses. You might wonder why that was a positive change.

Consider that, prior to the launch of unlimited plans in mid-February, Verizon had a retail postpaid phone net loss of 398,000. After the launch, Verizon added 109,000 retail postpaid phone connections. In other words, the new plans accounted for a positive net swing of about 90,000 accounts.

For the entire first quarter of 2017, Verizon added a net of 49,000 smartphones to its retail postpaid phone base.

Verizon's retail postpaid connections base grew 1.2 percent year over year to 108.5 million, and retail prepaid connections grew 0.5 percent to 5.4 million.

Retail postpaid churn was 1.15 percent in first-quarter 2017.

Total revenues were $20.9 billion in first-quarter 2017, a decline of 5.1 percent compared with first-quarter 2016, due to decreased overage revenue, lower postpaid customers in the quarter and continued promotional activity, Verizon said.

Trends in the fixed network segment were unsurprising. Total fixed network revenues declined 0.6 percent, to $7.9 billion, comparing first-quarter 2017 with first-quarter 2016.

On a comparable basis (excluding XO Communications results), the decline was 3.2 percent.

Total Fios revenues grew 4.7 percent, to $2.9 billion, quarter over quarter. Revenue growth of 0.7 percent in consumer markets and 2.3 percent in business markets was part of the increase.

In first-quarter 2017, Verizon added a net of 35,000 Fios Internet connections and lost a net of 13,000 Fios Video connections. At the end of first-quarter 2017, Verizon had 5.7 million Fios Internet connections and 4.7 million Fios Video connections, year-over-year increases of 3.3 percent and 0.1 percent, respectively.
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