Why Verizon Is Losing Customers Like Crazy
Verizon is hemorrhaging customers like crazy, and its for reasons the company likely never even saw coming.
This article is more than 2 years old
Verizon is one of the most successful cellular companies in America. But over the last year, the company has been dropping in customer sales. Though its revenue growth increased minimally, the cellphone company is still on a downward spiral. Due to a combination of inflation and geopolitical issues, Verizon’s customer base has suffered.
In this latest quarter, Verizon lost an astonishing amount of customer subscription services. A total of 215,000 postpaid phone subscriptions were dropped from the carrier company, which is a devastating figure. Postpaid subscription metrics often judge phone companies’ current success because they indicate how many customers are paying monthly who often have higher credit scores. Though Verizon’s postpaid phone subscriptions plummeted, there was a 200,000 increase in 227,000 postpaid business wireless subscriptions. Overall, Verizon had a net gain of 12,000 subscribers, which was lower than anticipated for its quarterly subscriber expectations.
Verizon is not only up against a challenging economic climate but other competitive and, perhaps, more successful phone carriers. AT&T’s quarterly earnings showcased an 800,000 customer increase in its postpaid subscribers. This is a massive discrepancy between AT&T and Verizon’s recent loss in postpaid phone subscribers. Hans Vestberg, chairman and chief executive officer at Verizon, commented on this subscriber decrease. He stated that the company was “not satisfied” with the outcome of the carrier’s quarterly earnings. Hopefully, this surprising decrease in customer sales will galvanize the company to create a new strategy to regain its valued subscribers.
Vestberg commented on his dissatisfaction with the second quarter’s earnings but believes its most significant issue is the current economic state. Inflation has hit many industries tremendously, and cellular companies are no exception. Inflation is likely the reason why Verizon, and many other tech companies, are beginning to drop in general sales and customers. But, Verizon’s CEO and other management are implementing new tactics that will hopefully accelerate revenue next quarter.
Price hikes for Verizon’s phone subscription plans will be enforced before the following quarterly earnings report. Older shared data plans will also receive a similar price increase, which may frustrate longtime customers. Alongside this push for higher-cost subscription services, Verizon is also attempting to attract customers who want to pay less. Verizon’s new Welcome Unlimited plan with cheaper rates is one way the carrier seeks to entice customers with a budget. One line subscriptions will be available for $65 per month, while 4 line subscriptions will go for $120 per month, which is $30 per line. However, there are a couple of caveats with this offer, like no device promotions or adding other people with different Verizon plans to the Unlimited plan.
Verizon tried to attract more high-end customers by installing more C-band 5G towers. Now, 47% of postpaid phone subscribers are using 5G handsets, which is up from 40% in 2022’s first quarter. Verizon has launched expensive promotions to advertise the company’s new, faster service, but many customers have yet to upgrade. Whether customers are satisfied with their current service or are too financially crunched to upgrade, both could be critical factors for 5G’s slow increase.
