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Verizon Is Focused on Maintaining Its Postpaid Phone Churn Rate

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Verizon focuses on retaining customers

Verizon (VZ) has been consistently focusing on improving its network to add more customers, as a mobile carrier’s customer base determines its performance.

In the fourth quarter, the largest US (SPY) wireless carrier by subscribers added a significant number of postpaid customers but lost prepaid customers.

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Verizon added customers

In the fourth quarter, Verizon added 1.13 million net retail customers compared to its addition of 990,000 customers in the previous year’s quarter. The US telecommunications company added a total of 1.22 million retail postpaid customers, while it lost 90,000 retail prepaid customers. The company added ~11,000 tablet customers and 556,000 customers in other connected devices, primarily wearables. Verizon also reported postpaid smartphone net additions of 873,000, higher than its additions of 510,000 in the preceding quarter and 647,000 in the previous year’s quarter.

The company added net 653,000 postpaid phone subscribers during the fourth quarter, beating analysts’ estimate of 355,600 postpaid phone customer net additions and the 295,000 customer additions it reported in the third quarter. If we look at the company’s peers, analysts expect T-Mobile (TMUS) to add 1 million net postpaid phone subscribers in the fourth quarter and AT&T (T) to add 200,000 postpaid phone customers in the quarter. However, Sprint (S) is expected to lose 65,000 net postpaid phone customers in the quarter.

As of December 30, 2018, Verizon had a total of 118.0 million retail connections, up 1.5% YoY (year-over-year), including ~113.4 million postpaid connections, up 2.3%, and 4.6 million prepaid connections, down 14.0%.

Churn rate

Verizon’s total retail postpaid churn rate increased to 1.08% in the fourth quarter compared to 1.00% in the previous year’s quarter. Its postpaid phone churn rate was 0.82% in the fourth quarter compared to 0.77% in the previous year’s quarter. Though its postpaid phone churn rate increased YoY, the company still managed to produce retail postpaid phone churn of less than 0.90% in the past 15 consecutive quarters.

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