Verizon ended the year by gaining more phone and Internet subscribers during the holiday season, the carrier said in its fourth-quarter earnings call.
The carrier has seen a positive turnaround after several tough quarters last year in which price hikes led phone subscribers to abandon their plans. During the fourth quarter, Verizon added 217,000 net postpaid phone subscribers, a metric used by the industry as an indicator of success, though the majority were business customers with just 41,000 net postpaid consumer subscribers, according to a statement. Press.
Verizon’s turnaround was driven by generous promotions and trade-in offers. But consumers will see fewer financial incentives to switch in the future. CEO Hans Vestberg warned in a call with Wall Street analysts on Tuesday that the company is weaning itself off those deals even if it results in short-term losses.
“We believe the current promotional incentives are not sustainable for the industry,” Vestberg said.
Verizon hit 200 million people with its C-band flavor of midrange 5G coverage and is on track to hit its goal of 250 million by the end of 2023, Vestberg said. When the full C-band service goes live by the end of the year, subscribers should see speeds increase to 2.4 Gbps from the current 900 Mbps.
Verizon lost 175,000 net prepaid subscribers for the quarter, after the carrier launched its Total by Verizon prepaid line to compete with T-Mobile’s Metro and AT&T’s Cricket brands of affordable phone plan providers.
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Verizon continued to expand its fixed wireless subscriber base with gains of 379,000 net additions, bringing the year-end total to 1.3 million more net subscribers than at the start of the year. . Broadband gains were much more modest, with 59,000 additions to the Fios wired Internet network. Verizon said it had the best broadband gains in more than a decade, and Vestberg said it continues to expect fiber expansion in the years to come.
Verizon posted revenue of $35.3 billion in the quarter, slightly beating expectations of $35.1 billion and up 3.5% from the same period last year, a carrier increase credited to migrations to more expensive unlimited plans, rate hikes earlier in the year and a full quarter of contributions from prepaid phone subsidiary TracFone, which Verizon acquired in late 2021.
The carrier reported net income of $6.7 billion, or $1.56 in earnings per share. Its adjusted earnings were $1.19 per share, exactly meeting the expectations of analysts polled by Yahoo Finance.
Verizon has set wireless revenue growth expectations of 2.5% to 4.5% for 2023, with more cash freed up after completing its 5G C-band rollout by the end of 2022.
Verizon stock fell 1.69% to $38.96 in premarket trading on Tuesday.