Verizon’s customer retention in 3Q15
In the last part of this series, we learned about the moderate year-over-year (or YoY) growth anticipated by Wall Street for Verizon’s (VZ) revenue from the wireless segment in 3Q15. In the next two parts of this series, we will look at expectations for the wireless customer metrics of the telecom company.
We’ll start with Verizon’s customer retention in the postpaid segment. Wall Street analysts expect Verizon’s postpaid churn in 3Q15 to be similar to what it was a year earlier. However, on a sequential basis, Verizon’s postpaid churn is expected to increase during the quarter.
The consensus estimate of Wall Street analysts for Verizon’s postpaid churn for 3Q15 is ~1%. As you can see in the above chart, this is equal to the company’s figure for 3Q14. However, it is much higher than Verizon’s postpaid churn of ~0.9% during 2Q15.
Verizon’s churn in 2Q15
In 2Q15, Verizon’s postpaid churn improved YoY from ~0.94% during 2Q14. The improvement in churn was significant sequentially. Verizon’s postpaid churn in 1Q15 was ~1.03%. According to the company, the improvement in the retention of basic phone customers positively impacted the overall churn in the postpaid segment.
In 2Q15, Verizon’s postpaid churn was the best among the largest four US wireless carriers. In this metric, AT&T (T) followed Verizon and had a postpaid churn of 1.01% during the quarter. T-Mobile’s (TMUS) postpaid phone churn was 1.32% during 2Q15. Meanwhile, Sprint Platform’s postpaid churn was ~1.56% during the same quarter.
Instead of taking a direct exposure to Verizon’s stock, you may take a diversified exposure to the telecom company by investing in the iShares MSCI USA Minimum Volatility ETF (USMV). USMV held ~1.4% in Verizon at the end of August 2015.