Published: Thu, April 20, 2017
Electronics | By Jesus Weaver

Verizon Reveals Huge Customer Losses Before Unlimited Data Plan

Verizon Reveals Huge Customer Losses Before Unlimited Data Plan

From the beginning of the year until the unlimited plan was unveiled on February 12, Verizon lost a net 398,000 regular monthly phone customers, by far the most it had ever lost in an entire quarter (the previous high was just 138,000, according to analyst Walt Piecyk at BTIG Research). In premarket trading the shares dropped another 2%, making the total loss for the year 10%.

The telecom giant's much-talked-about acquisition of Marissa Mayer's Yahoo is still pending, complicated by the two data breaches that Yahoo announced previous year, which affected up to 1.5 billion users throughout 2013 and 2014.

The New York company said that it lost 307,000 wireless subscribers who are billed each month, the more lucrative kind of wireless customer. Still, the number contrasts with a 640,000 gain in last year's Q1. Verizon is struggling to fend off smaller rivals T-Mobile US Inc TMUS.O and Sprint Corp S.N in a maturing market for USA wireless service. Prior to the launch in mid-February of Verizon Unlimited, the net loss was 398,000 postpaid customers, whereas in the rest of the quarter the company had a net gain of 109,000.

The decline contributed to a 19.8% drop in net income, to $3.55 billion, vs the period past year, on revenues of $29.81 billion, down 7.3%.

The company's revenue and profit came in less than Wall Street was expecting. Verizon added 35,000 Fios Internet net connections and lost 13,000 video connections.

Free cash flow turned to a negative USD 1.4 billion, compared to a positive USD 4.1 billion a year ago, due to a one-time pension contribution of USD 3.4 billion.

96 cents, according to Thomson Reuters analysts' consensus estimates.

Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.

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