Verizon Loses Postpaid Subs, Predicts Tracfone Buy Closing Q3
With T-Mobile coming on strong and competition intensifying, Verizon lost 178,000 postpaid wireless phone subscribers in Q1. Verizon was the first of the big three to report, with AT&T set for Thursday. Verizon’s buy of Tracfone will likely close in…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Q3, CEO Hans Vestberg told analysts Wednesday: “Everything we said from the beginning is holding true. The process is continuing as expected.” The FCC asked both companies last week for more data, including the deal's implications for Lifeline customers (see 2104140064). Vestberg defended the company’s $52.9 billion in bids in the C-band auction. “The combination of C band and our millimeter wave places us in a unique position of strength to execute on all 5G opportunities,” he said. Verizon ordered half the gear it needs to deploy in the C band this year, he said. Verizon is feeling effects from the pandemic, Vestberg said. “While we see significant progress in vaccinations, customer sentiment and recovery of our economy, there is still a lot to go before we are back to normal.” Asked if Verizon planned to apply for emergency broadband funds from the FCC, Vestberg said companies should take the lead, with government focusing on “affordability.” Profit was $5.4 billion, up from $4.3 billion a year ago and better than any quarter last year. Revenue was $32.9 billion, up from $31.6 billion. Verizon added a net 98,000 Fios customers but lost 82,000 pay-TV subscribers, citing "the ongoing shift from traditional linear video to over-the-top offerings." Verizon’s advantages in the 4G era are slipping away, MoffettNathanson’s Craig Moffett told investors. “In 5G, Verizon looks destined to be a fast-follower, at best,” he said. “Verizon is quick to argue that T-Mobile’s 2.5 GHz spectrum won’t translate into a coverage advantage (they argue that their newly-won 3.7 GHz spectrum will propagate just as far given allowable power level differences). Good try. But T-Mobile has more spectrum, they have it sooner, and they’re already far down the road of building out their network.” New Street’s Jonathan Chaplin said he’s watching long-term trends for Verizon more than quarterly results. “We were surprised by long-term guidance of flat margins amid improving revenue growth; wireless has always been a business with operating leverage,” he told investors: “We suspect the investment in infrastructure to deploy C-Band is driving up fixed costs.”