Verizon Loses More Subscribers Than Expected in Tight Market-OxBig News Network

Verizon Communications Inc. reported a larger-than-expected decline in mobile-phone subscribers in the first quarter, the result of heavy competition and less spending by government agencies. 

The largest US wireless provider recorded a loss of 289,000 monthly phone subscribers, according to a statement Tuesday, more than the 185,500 loss estimated by analysts on average. That’s a significant reversal from the 568,000 subscribers added in the fourth quarter and more than double the decline recorded at the same point last year. Verizon attributed some of the loss to reductions at some federal agencies, as the Trump administration moves to slash thousands of jobs. 

“We saw some impact of the new government and their efficiency work,” Chief Executive Officer Hans Vestberg told analysts on a call.

Verizon, AT&T Inc. and T-Mobile US Inc. are locked in a tight race to win customers in a saturated market. Last month, Verizon Chief Revenue Officer Frank Boulben warned that subscriber numbers were “probably going to be soft” due to an “elevated level of competitive intensity.” After the Christmas holiday, Verizon ended its seasonal promotions, while rivals didn’t, he said. Customers also are keeping their phones longer.

The company has increased monthly rates and fees over the past few years to boost revenue, which has been little changed for the last five quarters. To woo new subscribers and to keep current customers from leaving, Verizon this month promised a three-year price guarantee and a free phone trade-in for mobile-phone and home-internet plans. 

The quarter’s net losses “reflect the impact of recent pricing actions,” Chief Financial Officer Tony Skiadas told analysts on Tuesday, but he said the company still “exited the first quarter with positive momentum.”

If prices of mobile handsets increase in the months ahead under tariffs on US imports imposed by President Donald Trump, Vestberg said consumers would be the ones to pay the price.

“We will continue to be financially disciplined in whatever promotions we have, but we will not cover any enormous increase on tariffs on handsets,” Vestberg told analysts on the call. “That’s ultimately going to be passed on to consumers.”

Verizon and its peers are so far “largely shielded by their US focus and utility-like models” from negative impacts of the tariffs, according to Bloomberg Intelligence. The companies could experience longer-term effects, like customers downgrading from premium phone plans, the analysts wrote.

In the shorter term, the companies will see a “stable to slight increase in the handset replacement rate as there was an uptick in consumers buying handsets ahead of the tariffs,” Roger Entner, an analyst at Recon Analytics, said in an email. Verizon didn’t record a gain in device sales in the first quarter, but expects the rate to climb later this year. 

A decline in immigration rates, which typically drive a portion of new customer growth, hasn’t dragged down sales, said Sowmyanarayan Sampath, head of Verizon’s consumer division, partly because prepaid customers are upgrading to more premium plans. “We’re gaining on the higher end of prepaid, which is why we are seeing strong performance despite low immigration in those segments,” he said.

First-quarter operating revenue increased to $33.5 billion, topping the $33.3 billion average of estimates. Adjusted earnings were $1.19 a share, beating projections for $1.15. The company reaffirmed all guidance for the year, including adjusted growth of 2% to 3.5% in earnings before interest, taxes, depreciation and amortization.

Vestberg noted that the first quarter’s adjusted Ebitda of $12.6 billion is the company’s “highest reported result ever.” 

Broadband continued to be a bright spot for the company, with Verizon adding 339,000 internet customers. Verizon and its peers have been siphoning market share from cable companies by offering fiber connections and home wireless service powered by their 5G networks and bundled with their mobile plans and content packages. Verizon’s pending acquisition of Frontier Communications Parent Inc., would expand its fiber footprint. 

“This transaction will help enable a long-term goal of offering broadband to over 100 million premises, including fiber passings of 35 million to 40 million,” Sampath said.

Frontier has said it expects the transaction to close in the first quarter of 2026. 

Verizon is the first of the big three US telecom companies to report first-quarter results. AT&T publishes on Wednesday and T-Mobile follows on Thursday. Verizon shares slid 1.8% Tuesday morning in New York.

With assistance from Keith Gerstein.

This article was generated from an automated news agency feed without modifications to text.