Verizon has long tried to claim that its wireless network is so superior, it doesn't need to compete with T-Mobile on price. But the company's latest earnings report suggest that T-Mobile continues to drag down the companies subscriber tallies, suggesting that Verizon's message isn't working quite like it used to as T-Mobile's network improves and Verizon refuses to match many of T-Mobile's promotions.
According to the latest earnings report, Verizon lost 36,000 phone customers on the quarter.
And while the company says it added 442,000 postpaid additions last quarter, the lion's share of those additions were tablets (often given away at steep discounts) and connected car customers (which may or may not actually stay connected). These tallies disappointed Wall Street analysts, which were expecting postpaid additions somewhere closer to 766,000.
BTIG analyst Walter Piecyk notes that this is the first time Verizon’s post-paid paid phone base has declined in the third quarter, which should be setting off some alarm bells at Verizon Wireless.
Fortunately for Verizon, profitability still isn't a problem thanks to having some of the most expensive service in the wireless industry. Though quarterly profits of $3.75 billion were down notably from $4.17 billion this time last year.
On the FiOS and fixed-line broadband side of the equation things improved from last quarter's poor showing due to Verizon's worker strike. The company added a net 90,000 Fios Internet connections and 36,000 Fios Video connections, but saw an overall net loss of 66,000 broadband subscribers thanks to Verizon's efforts to drive away the company's unwanted DSL subscribers across countless markets.
With growth slowing in both wireless and fixed line broadband, it makes sense that Verizon has started looking to expand into the advertising and content business via its acquisition of Yahoo and AOL. That said, between the
failure of its Go90 streaming platform and the recent
hacking and
surveillance scandals plaguing Yahoo, Verizon's pivot efforts haven't been off to a particularly stellar start.