Verizon competes on network performance
In the previous part of this series, we learned that Verizon (VZ) had the best postpaid churn among national wireless carriers in 4Q14. Verizon was able to manage its postpaid churn better than AT&T (T) in the highly competitive quarter. AT&T’s postpaid churn increased at a faster rate sequentially than Verizon’s during the quarter. Here, we’ll look at a key strength for Verizon that may have helped the company retain customers during the quarter.
National wireless carriers resorted to price competition in 4Q14 in order to acquire and retain customers. However, both Verizon and AT&T also competed with the other national wireless carriers based on their better network performance.
Verizon continues to have the best network performance
According to a recent report by RootMetrics, Verizon retained its top spot in terms of overall network performance in 2H14. Verizon even had the best network performance among national wireless carriers in the first half of 2014. It also got the best performance scores in network reliability and speed as well as data and call performance for 2H14.
Similar to in 1H14, AT&T closely followed Verizon in these categories. However, Verizon’s rank based on text performance scores slid further from second place in 1H14 to third in 2H14. AT&T retained its first rank in that category.
In terms of overall performance, Sprint (S) moved to the third spot in 2H14. It had the worst network performance in 1H14.
T-Mobile (TMUS) couldn’t retain its third rank in the category. It had in 1H14, and it took the last spot among national wireless carriers in 2H14.
If you want to take on diversified exposure to Verizon—the national wireless carrier with the best network performance—you can invest in the Technology Select Sector SPDR Fund (XLK). The ETF held ~5% in the company on March 19, 2015.
You can also get more diversified exposure to Verizon by investing in the iShares Russell 1000 Growth ETF (IWF). This ETF held ~1.8% in the company on the same date.