Verizon on Tuesday reported adding 260,000 net retail postpaid connections and 1.04 percent postpaid churn in the first quarter of 2018.
The carrier said it added a net of 220,000 postpaid smartphones during the period, but net phones and tablets fell by 24,000 and 75,000, respectively. Those totals, however, were offset by gains of 359,000 in wearables and other connected devices.
Net retail connections, meanwhile, fell by 75,000 due to a larger-than-expected 335,000 decrease in retail prepaid.
Company officials nonetheless touted 0.80 percent retail postpaid phone churn and said unsubsidized plans accounted for 81 percent of its postpaid phone base — up from 72 percent during the same period last year.
“We began 2018 with strong momentum, and we expect it to continue throughout the year,” Verizon Chairman and CEO Lowell McAdam said in a statement.
Wells Fargo senior analyst Jennifer Fritzsche wrote in a research note that the postpaid net additions sharply exceeded the firm’s projections, while net phone losses were less than one-third of Wells Fargo’s forecast. Postpaid churn was about in-line with projections while prepaid net losses were dramatically higher than estimated.
“It will be interesting to monitor where these prepay subs went to when other carriers report,” Fritzsche wrote.
Verizon reported total wireless revenues of $21.9 billion and adjusted wireless earnings of $10.5 billion, which exceeded Wall Street expectations, as did the company’s overall $31.8 billion in consolidated operating revenue and $11.7 billion in adjusted earnings.
Service revenues were flat for the quarter, but Fritzsche noted that wireless service revenues shifted into positive territory in March, “representing an important inflection point.”
She added that Wells Fargo expects Verizon to report the “lowest phone churn of any carrier in Q1” despite its status as the only major carrier “not to have a bundled video offering.”
