uploads///Telecom Q Postpaid Phone Churn_Peers

How Verizon Is Working to Keep Its Churn Rate Low

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Mar. 13 2019, Published 2:30 p.m. ET

Verizon’s postpaid phone churn rate

In this article, we’ll discuss Verizon’s (VZ) customer retention metric, the churn rate. Verizon is the leading US mobile operator with the largest retail postpaid market share and the lowest postpaid phone churn rate. The company has been consistently focusing on enhancing its network to add more subscribers, as a mobile carrier’s subscriber base determines its performance.

Verizon has managed to report a retail postpaid phone churn rate of 0.90% or better for the last 15 quarters with the retail postpaid phone churn rate coming in at 0.82% in the fourth quarter of 2018. The company attributed this to the increased customer satisfaction and loyalty resulting from ongoing improvements to its network quality and customer service.

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Peer comparison

AT&T (T) reported a postpaid phone churn rate of 1.00% in the fourth quarter of 2018. Meanwhile, Sprint (S) posted a postpaid phone customer retention rate of 1.84% in the third quarter of fiscal 2018 (quarter ended December 31). T-Mobile’s (TMUS) postpaid phone churn rate of 0.99% in the fourth quarter of 2018 improved from 1.18% in the year-ago quarter.

The lower churn rate helps wireless carriers save acquisition costs associated with acquiring a customer, which helps them expand their operating margins.

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