The largest wireless carrier in the US learned a bit about basic economics during the third quarter. After increasing the administrative charge for postpaid subscribers by $1.35 to $3.30 per voice line, the number of postpaid phone subscribers decreased by 189,000 year-over-year during the third quarter with a churn rate of 0 .88%. Churn is the percentage of subscribers (sometimes in a specific category) leaving one operator for another, and it increased in the quarter due to the higher admin fee.
53% of Verizon consumer subscribers own a 5G-enabled phone
53% of Verizon consumer subscribers have a 5G phone
On the business side, Verizon added 197,000 net new postpaid phone subscribers during the three months. This allowed it to register its fifth consecutive quarter with at least 150,000 net new postpaid telephony subscribers in its business unit. The churn of the business sector postpaid telephony business was 1.10%. Business Wireless group revenue increased 5.7% annually to $3.3 billion. The increase is due to higher prices and the growth of the customer base.
Verizon Chairman and CEO Hans Vestberg said, “We took a number of steps in the third quarter that helped drive better operating and financial performance, but we know there is still work to be done. The pricing steps we took at earlier this year as well as our new cost savings program, show that we are being deliberate and strategic in our decisions to strengthen our business At the same time, we are focused on executing our 5G strategy as we are covering all major markets and accelerating our C-band network build. We’re on track to hit 200 million POPs in Q1 2023.”
Ellis also said that “the actions we have taken in the past two quarters are gaining traction in the market. We look forward to building on this momentum going forward. Our financial discipline, combined with our healthy balance sheet, allowed us to increase our dividend for the 16th year in a row.” , which is the longest current streak of dividend increases in the US telecommunications industry.
Verizon shares hit their lowest price in more than a decade
Overall, Verizon reported third-quarter revenue of $34.2 billion, 4% higher than gross revenue collected during the same quarter last year. Net income of $5.02 billion decreased 23.3% from the $6.55 billion of net income it reported during the third quarter of 2021. Diluted earnings per share decreased 24.5%, from $1.55 during the third quarter of last year to $1.17 in the third quarter of this year.
Verizon had a pretax loss of $881 million that included the adjustment of pension liabilities to reflect current security prices and the adjustment of certain assets related to the TracFone acquisition.