uploads///Verizon Q Post Net Tablet and Net Postpaid Phone Additions

Is the Tablet Adding Value to Verizon’s Business?

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Nov. 18 2016, Updated 10:04 p.m. ET

Verizon’s postpaid net additions in 3Q16

In the first part of this series, we looked at Verizon’s (VZ) wireline segment’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin over the last few quarters. Verizon’s postpaid net additions, or net adds, totaled 442,000 in 3Q16, driven by tablets and other device additions. This was a sequential fall of 173,000 subscribers.

The main reason for the fall in subscribers is that smaller rivals T-Mobile (TMUS) and Sprint (S) are using price cuts as an aggressive way to gain subscribers at the expense of Verizon and AT&T (T).

These net adds don’t include wholesale device and wholesale IoT (Internet of Things) segment connections. Verizon’s retail postpaid connections rose 3.0% YoY (year-over-year) to 108.2 million in 3Q16.

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Verizon’s tablet net additions in 3Q16

In 3Q16, Verizon’s tablet net adds were 221,000. For the first time ever, Verizon lost 36,000 net postpaid phone subscribers. All other device additions totaled 257,000, the primary driver being Verizon Wireless retail Hum devices.

Verizon has been increasing its focus on tablets and expects them to add value to its business in the future. The company believes that tablet users watch more videos. Since Verizon now has a portfolio of video platforms such as AOL, Yahoo!, and go90, the company can offer more data usage on its tablets.

Tablets help Verizon earn more revenues not only from higher data usage but also from revenues associated with video advertisements.

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