Verizon Added More than 300K Postpaid Wireless Subs in Q4
Verizon Tuesday reported it added a net 318,000 consumer wireless postpaid phone customers in Q4, compared with just 41,000 a year ago. Verizon also saw 375,000 fixed wireless adds in the quarter, bringing its total to more than 3 million. Officials said Verizon is on track to hit as many as 5 million by the end of 2025. Verizon was the first of the major wireless carriers to report Q4 results. Verizon finished up 6.7% Tuesday at $42.23 per share.
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For Verizon, “2023 was a year of continuous improvement and important actions across the business,” CEO Hans Vestberg told investors: “We stabilized our core business and positioned the company for renewed growth and profitability.”
Verizon reported that its performance was better in the markets where C-band is deployed. In Verizon's first 76 C-band markets, Q4 postpaid phone gross adds were more than 8% higher than in non-C-band markets and churn was lower, Verizon said. About 80% of FWA adds came in C-band markets, the company said.
Verizon’s results in C-band markets “speak for themselves and support our investment decisions,” Vestberg said. “We're now seeing our investment in C-band paying off in terms of customer experience and loyalty,” said Chief Financial Officer Tony Skiadas. Verizon went big in the 2021 C-band auction, bidding $45 billion, plus $8 billion in incentive costs to satellite operators (see 2108170060).
Verizon’s projected numbers for 2024 are based on the assumption that the affordable connectivity program (ACP) will be renewed, Skiadas said. However, if it is not, Verizon’s exposure is minimal, he said. About 1.2 million prepaid subscribers benefit from the ACP, less than 10% of the prepaid base, he said. Few postpaid wireless or Fios customers are part of the program, he added.
Vestberg credited, in part, simplified price plans introduced last year (see 2305160056) for postpaid growth. “It is clear that we have momentum in [the consumer segment] as we move into 2024, and we'll continue to work to get our fair share on new business,” he said. Verizon’s “value business” continues to lag, with 289,000 wireless retail prepaid net losses in the quarter. Verizon offers budget plans through Tracfone, Visible and Total by Verizon. “We still have work to do but are making progress,” Vestberg said.
Verizon reported earnings of 64 cents per share for the quarter, compared with $1.56 a year ago. Total operating revenue came in at $35.1 billion, down 0.3% from last year. Free cash flow for 2023 was $18.7 billion, up from $14.1 billion in 2022. Postpaid phone churn for the quarter was 0.88%. Fios internet adds were 55,000, down 4,000 over last year. Capital spending for the full year is projected at up to $17.5 billion, compared with $18.8 billion in 2023.
Like many other companies, Verizon is taking a hit from the rising cost of capital. The company guided to full year adjusted earnings per share of $4.50-4.70, lower by 16-19 cents because of higher interest rates.
"Continued growth within its fixed wireless customer base and a rebound in consumer retail postpaid plans are signs the company is still able to compete and win in what is a saturated market environment," said Third Bridge analyst Jamie Lumley. New Street’s Jonathan Chaplin saw the FWA numbers as "a little soft” and slightly below New Street’s projections.