- Verizon warns of soft wireless subscriber growth in Q1 due to off-season promotions by rivals.
- Shares of Verizon, AT&T, and T-Mobile US decline amid market concerns.
What happened: Verizon signals slow subscriber growth
Verizon Communications has issued a warning that off-season promotions by competitors are likely to result in “soft” wireless subscriber growth in the first quarter of 2025. This announcement has led to a significant drop in Verizon’s shares, with a decline of over 7% on Tuesday. The company’s Chief Revenue Officer, Frank Boulben, highlighted intensified competition as a key factor, noting that rivals continued aggressive promotions in the first quarter, unlike Verizon. This has led to a challenging market environment, with Boulben describing the first quarter as “a bit unusual”.
The warning comes against a backdrop of a saturated US telecom market, where companies have increasingly relied on incentives to attract customers. While these incentives have boosted subscriber numbers, they have also raised concerns about profitability. Additionally, Verizon flagged a “slow start” to phone upgrades in Q1, attributing this to economic uncertainties and a lack of major new device features. Despite these near-term challenges, Verizon remains optimistic about exceeding its 2024 subscriber additions in 2025, driven by its customizable myPlan.
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Why it is important:
Verizon’s warning reflects broader challenges in the US telecom sector, where growth opportunities are shrinking due to market saturation and increased competition. The decline in shares of major telecom firms, including AT&T and T-Mobile US, underscores the sector’s sensitivity to competitive pressures and economic conditions. Furthermore, the impact of US immigration policies and the potential for disruption from satellite internet providers like SpaceX’s Starlink add layers of complexity to the industry’s outlook. This situation highlights the need for telecom companies to adapt their strategies to maintain growth and profitability in a rapidly evolving market landscape.
