Commentary

Verizon's Unlimited Data Plan Stems The Bleeding

Late to respond to its feisty competitors’ unlimited-data offerings, Verizon lost wireless customers — 289,000 cellphone subscribers and about 307,000 overall — for the first time ever during the first quarter. Revenue dropped 5% to $20.9 billion, according to its news release.

“Even though Verizon usually loses some cellular customers every quarter, it has historically lured enough back to be able to report growth in that part of its business. But recent months have seen hundreds of thousands of customers defect to competitors such as T-Mobile and Sprint, analysts say,” Brian Fung reports for the Washington Post.

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“It looks like Paul Marcarelli — the guy who used to say ‘Can you hear me now?’ for Verizon but became a Sprint pitchman last year — isn't the only one who’s left Verizon lately,” is how Paul R. La Monica puts it in his lede for CNNMoney

Verizon reintroduced unlimited data offerings in February. That move not only stemmed defections — or “positively changed the trajectory of customer additions” as Verizon puts it — it also netted 110,000 additional subscribers, averting more painful numbers for the quarter. 

But its “plans are more expensive than options from Sprint and T-Mobile, so the company will have to show it still has the ability to draw customers willing to pay more for a better network. AT&T's unlimited plan costs about the same as Verizon’s; a cheaper unlimited option has fewer features,” according to the Associated Press.

“The most telling number in Verizon’s earnings report is the level of ‘churn,’ which measures turnover in customers. A higher level of churn indicates more customers hopping between different carriers, which is normally indicative of a highly competitive environment,” points out Chris Mills for BGR. “Verizon’s churn increased from 1.03 to 1.15% of all customers in the first quarter, a strong sign that the race-to-the-bottom between the carriers is starting to see results.”

For those addicted to Snapchat or the latest tweets out of D.C. at any rate.

“The industry’s bruising price war has been a boon to consumers. Wireless bills are a major household expense, and their continued decline had a big impact on March’s surprising 0.3% drop in the consumer-price index. Prices for wireless telephone services fell 11.4% in March from a year earlier, and declined 7% from February,” Ryan Knutson and Joshua Jamerson observe for the Wall Street Journal.

“We’re confident in executing our strategy organically, but if there’s the right opportunity out there to accelerate the strategy inorganically in a way that adds holder value, we’re always looking at those opportunities,” Verizon CFO Matt Ellis said on an analysts call, they report.

Meanwhile, “Verizon has been looking for additional revenue streams and is in the process of acquiring Yahoo's core business. … The deal is seen as a way for Verizon to gain content, an audience and valuable user data and reflects its ambitions of becoming a mobile media company,” writes Lauren Gensler for Forbes. “Verizon's CEO, Lowell McAdam, also suggested this week that he would be open to merger talks with companies like Comcast, Disney or CBS, according to Bloomberg.”

But while it still remains a little offshoot of Ma Bell, it’s breaking a new campaign today that will add actual employees to spots featuring Thomas Middleditch, star of the HBO comedy Silicon Valley, Aaron Pressman reports for Fortune.

First up is systems performance engineer Ammara Bhaimeah, an electrical engineer with a masters degree from UCLA who works in Verizon's Irvine, Calif., office and loves the HBO show that mercilessly spoofs her profession,” Pressman writes. “Verizon hopes the new spots reinforce the message that it still has the best performing wireless network as measured in a variety of surveys.”

Its competitors, however, have been eating away at Verizon’s ability to claim a superior network. “At least three of the four nationwide carriers [are] inching closer to network parity in the major markets,” Recon Analytics analyst Roger Entner tells the WaPo’s Fung.

“We thought having an employee in here would be a great way to show behind the scenes what makes our network great,” Mike Haberman, Verizon vice president of network, tells Fortune’s Pressman. “This isn't just something we have as a motto or slogan.”

It remains to be heard just how effective it will be.

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