Verizon’s best churn among peers
In the previous parts of this series, we learned about the top network performance of Verizon (VZ) among its peers, including AT&T (T), Sprint (S), and T-Mobile (TMUS), based on third-party reports. We mentioned the RootMetrics 1H15 National RootScore report and the J.D. Power 2015 Wireless Network Quality Performance Study, Volume 2.
Verizon’s superior network performance should help the company in managing retention of its wireless customers. Verizon commanded the best customer retention rate among the top four carriers in the US in 2Q15.
In a saturated wireless market such as the US, the competition for retaining as well as gaining customers—among the top four players—remains high. In 2Q15, Verizon’s postpaid churn was ~0.9%. This was significantly lower than AT&T’s (T) churn of ~1.01% during the quarter. AT&T had the best churn among the top four US wireless carriers in 1Q15.
Among these carriers, Sprint Platform had the highest postpaid churn rate of ~1.56%. The postpaid phone churn of T-Mobile was 1.32% during 2Q15.
Verizon’s churn in 2Q15
The last quarter was Verizon’s best quarter in terms of postpaid churn in the previous three years, according to the telecom company. Verizon’s churn metric measured postpaid customers contracted YoY (or year-over-year) during 2Q15. The telecom company’s reported postpaid churn in 2Q15 was lower than the ~0.94% churn figure during 2Q14. Its postpaid churn in 1Q15 was ~1.03%.
You may take exposure to Verizon while diversifying risk by investing in the iShares MSCI USA Minimum Volatility ETF (USMV) or the iShares Russell 1000 Growth ETF (IWF). USMV held ~1.4% in Verizon as of August 31, 2015. Verizon contributed to ~1.7% of IWF’s holdings on the same date.