Verizon, the largest wireless carrier in the U.S., is not optimistic about its growth projections for the current first quarter of 2025. The company attributes its expected “soft” subscriber growth to aggressive off-season promotions by competing wireless providers. This forecast has caused Verizon’s stock to decline by 7% in a single day, triggering a broader sell-off within the telecom industry. After a successful December quarter that featured seasonal holiday promotions, Verizon chose to pull back on offering enticing deals to its customers.
However, this strategy backfired. According to Chief Revenue Officer Frank Boulben, speaking at Deutsche Bank’s Media, Internet & Telecom Conference, Verizon’s lack of promotional incentives made it less competitive as rivals continued to attract customers through discounts and offers. Boulben characterized the current quarter’s challenge as “a bit unusual.” Competitors have ramped up promotions to lure new customers and entice those from other carriers to switch.
For instance, T-Mobile recently increased its payout for customers switching to its network, offering as much as $800 per line. Such initiatives have also affected stock prices across the sector, with T-Mobile shares dropping 3.66% and AT&T’s stock falling by 2%. Analyst Paolo Pescatore indicated that the opportunity for wireless firms to add subscribers is decreasing as major broadband companies like Comcast are also launching aggressive promotions. Verizon and AT&T maintain that tougher immigration policies imposed by President Donald Trump will have limited effects on their subscriber numbers since postpaid customers require identification.
Despite the challenges, Verizon anticipates adding more postpaid customers this year than in 2024, driven by customizable plan options. Postpaid customers are generally more profitable for the company, as they are less likely to switch providers compared to prepaid customers, who tend to be more price-sensitive.