Latest news with #Vestberg
Miami Herald
22-05-2025
- Business
- Miami Herald
Verizon makes bold move to make it harder for customers to leave
Over the past few months, Verizon has seen an uptick in the number of customers opting to switch to other phone providers. In Verizon's latest earnings report, it revealed that it faced a net loss of 289,000 total postpaid phone customers during the first quarter of 2025. Don't miss the move: Subscribe to TheStreet's free daily newsletter In a note to investors, analysts at New Street Research said the steep loss in customers matches Verizon's "worst result on record." Related: Verizon suffers major loss as customers switch gears The loss comes after Verizon issued several price hikes earlier this year, frustrating customers who are already battling inflation and higher costs of living. During an earnings call on April 22, Verizon CEO Hans Vestberg admitted that recent price increases contributed to the startling decrease in customers during the quarter. "We did have a slow start on postpaid phone net adds, largely driven by elevated churn due to recent price ups and pressure from federal government accounts," said Vestberg. Image source: Mordant/Bloomberg via Getty Images As Verizon struggles with fleeing customers, it is quietly pushing for the Trump administration to make it harder for customers to easily switch phone providers. On May 19, Verizon officially submitted a request to the Federal Communications Commission to waive its requirement to follow its Unlocking Rule. The rule requires Verizon to automatically unlock a phone a customer purchases from it after 60 days, allowing that customer to use that device on another phone carrier's network. Verizon was first required to adhere to the rule when it purchased licenses to use 700MHz spectrum in 2008 and acquired TracFone in 2021. In the waiver request sent to the FCC, Verizon claims that the rule has had "unintended consequences" that have contributed to criminal activity. Related: T-Mobile pulls the plug on generous offer, angering customers "Recent industry experience shows that even a lock of 60 days does not deter device fraud – a huge and growing problem in the United States - and instead enables trafficking in devices that are illicitly sent to foreign marketplaces," said Verizon in the request. "This is why the industry standard for providers not subject to the Unlocking Rule is a minimum of 6 months or longer." The company said that the Unlocking Rule "benefits bad actors and fraudsters" and shifts costs and denies benefits to low-income consumers, while "punishing" phone providers. "Waiving this rule will benefit consumers because it will allow Verizon to continue offering subsidies and other mechanisms to make phones more affordable, lower upfront costs, and enable customers to obtain the latest and most innovative devices," said Verizon. The move from Verizon comes after FCC Chair Jessica Rosenworcel submitted a proposal last year that would require all phone providers to follow the Unlocking Rule. "Real competition benefits from transparency and consistency," said Rosenworcel in the proposal. "That is why we are proposing clear, nationwide mobile phone unlocking rules. When you buy a phone, you should have the freedom to decide when to change service to the carrier you want and not have the device you own stuck by practices that prevent you from making that choice." More Retail: Costco quietly plans to offer a convenient service for customersT-Mobile pulls the plug on generous offer, angering customersKellogg sounds alarm on unexpected shift in customer behavior She said the proposed rule would increase competition between phone service providers, as consumers would have more choices. Rosenworcel added that it would also decrease the costs consumers face when switching providers and reduce overall confusion, as the same rules on unlocking would apply to all phone carriers. In March last year, Verizon submitted a filing to the FCC claiming that the rule could negatively impact phone discounts. "Requiring carriers to unlock their mobile wireless devices – which often contain software that prevents them from operating on another carrier's network – allows consumers to switch providers more easily," said Verizon in the filing. "At the same time, however, an unlocking requirement may discourage a carrier from deeply discounting a phone because it cannot recoup its subsidy if a customer immediately moves to another carrier." Verizon also said in the filing that the rule could also have "complex tradeoffs and consequences for consumers and carriers," and that it is not clear that it would benefit consumers. "Providers rely on device locks to sustain their ability to offer such subsidies," said Verizon. "Device locking periods, in fact, may greatly benefit low-income consumers because they make devices more affordable, lowering the barrier to entry to mobile service." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
24-04-2025
- Business
- Miami Herald
Verizon suffers major loss as customers switch gears
Verizon (VZ) ruffled a few feathers at the beginning of this year when it decided to continue down the path of hiking prices for its mobile services. Shortly after ringing in the new year, Verizon announced in January that it was raising the monthly prices of its myPlan and New Verizon Plan wireless accounts due to "rising operational costs." Don't miss the move: Subscribe to TheStreet's free daily newsletter By March, it increased the price of its Verizon Mobile Protect Multi-Device plan and Verizon Mobile Secure Multi-Device plan by $8, which applied to wireless customers with four to 20 lines. Related: Verizon announces generous offer, but customers should beware While these significant pricing changes took place, many Verizon customers took to social media to air their frustrations about higher prices, with some threatening to switch phone providers. Image source: Morris/Bloomberg via Getty Images Amid these threats, Verizon recently revealed in its first-quarter earnings report for 2025 that while its wireless revenues increased by 2.7% year-over-year during the quarter, generating $20.8 billion, it faced a net loss of 289,000 total postpaid phone customers. In a note to investors, analysts at New Street Research said the loss in customers matches Verizon's "worst result on record." During an earnings call on April 22, Verizon CEO Hans Vestberg admitted that recent price increases contributed to the dip in customers during the quarter. Related: Verizon makes a desperate move to lure back fleeing customers "We did have a slow start on postpaid phone net adds, largely driven by elevated churn due to recent price ups and pressure from federal government accounts," said Vestberg. Despite this loss, Verizon Consumer Group CEO Sam Path emphasized during the call that the company does not regret recent price hikes. "We made a decision to price up certain cohorts in December and January, and they were the right trade-offs to make," said Path. "It helped us lock the revenue for the rest of the year, and it was the right thing to do." Vestberg also warned Verizon customers may soon see higher prices for mobile devices due to President Donald Trump's tariffs. Tariffs are taxes companies pay to import goods from overseas, and the additional cost is often filtered down to consumers through increased prices. "If we're going to see those type of increases on handsets that we've heard, we are not planning to absorb those," said Vestberg. "I mean, that needs to be passed onto the customers. That's the only way to do it because that's so much money." More Retail: AT&T quietly issues stern warning to customersSam's Club makes a big change to a beloved membership perkGameStop announces risky move amid store closures The warning comes after Verizon Chief Financial Officer Tony Skiadas flagged last month that the company is noticing year-over-year declines in the number of customers upgrading their phones. "Customers continue by choice to hang on to their phones for longer periods of time," said Skiadas during a Morgan Stanley conference last month. "The average upgrade cycle for us is up over 40 months. It's like 42 months right now. So the phones are made better. And from our standpoint, we'll continue to be disciplined in our approach to retention." In an effort to attract and retain customers in light of recent challenges, Verizon plans to pull several levers. "We are doubling down on our customer-first strategy with an increased focus on customer retention with the Verizon value guarantee, an industry-leading three-year price lock, free phone guarantee for everyone, and savings you cannot get elsewhere," said Path during the earnings call. Earlier this month, Verizon began offering a new three-year price lock guarantee to new and existing customers who have myPlan and myHome network plans. In addition, it has also started offering customers a free phone and home internet router when they trade in their devices. However, perks, discounts, taxes, and fees are excluded from this price-lock guarantee, which means that Verizon can still raise monthly bills by hiking fees or slashing discounts. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Mint
22-04-2025
- Business
- Mint
Verizon Loses More Subscribers Than Expected in Tight Market
Verizon Communications Inc. reported a larger-than-expected decline in mobile-phone subscribers in the first quarter, the result of heavy competition and less spending by government agencies. The largest US wireless provider recorded a loss of 289,000 monthly phone subscribers, according to a statement Tuesday, more than the 185,500 loss estimated by analysts on average. That's a significant reversal from the 568,000 subscribers added in the fourth quarter and more than double the decline recorded at the same point last year. Verizon attributed some of the loss to reductions at some federal agencies, as the Trump administration moves to slash thousands of jobs. 'We saw some impact of the new government and their efficiency work,' Chief Executive Officer Hans Vestberg told analysts on a call. Verizon, AT&T Inc. and T-Mobile US Inc. are locked in a tight race to win customers in a saturated market. Last month, Verizon Chief Revenue Officer Frank Boulben warned that subscriber numbers were 'probably going to be soft' due to an 'elevated level of competitive intensity.' After the Christmas holiday, Verizon ended its seasonal promotions, while rivals didn't, he said. Customers also are keeping their phones longer. The company has increased monthly rates and fees over the past few years to boost revenue, which has been little changed for the last five quarters. To woo new subscribers and to keep current customers from leaving, Verizon this month promised a three-year price guarantee and a free phone trade-in for mobile-phone and home-internet plans. The quarter's net losses 'reflect the impact of recent pricing actions,' Chief Financial Officer Tony Skiadas told analysts on Tuesday, but he said the company still 'exited the first quarter with positive momentum.' If prices of mobile handsets increase in the months ahead under tariffs on US imports imposed by President Donald Trump, Vestberg said consumers would be the ones to pay the price. 'We will continue to be financially disciplined in whatever promotions we have, but we will not cover any enormous increase on tariffs on handsets,' Vestberg told analysts on the call. 'That's ultimately going to be passed on to consumers.' Verizon and its peers are so far 'largely shielded by their US focus and utility-like models' from negative impacts of the tariffs, according to Bloomberg Intelligence. The companies could experience longer-term effects, like customers downgrading from premium phone plans, the analysts wrote. In the shorter term, the companies will see a 'stable to slight increase in the handset replacement rate as there was an uptick in consumers buying handsets ahead of the tariffs,' Roger Entner, an analyst at Recon Analytics, said in an email. Verizon didn't record a gain in device sales in the first quarter, but expects the rate to climb later this year. A decline in immigration rates, which typically drive a portion of new customer growth, hasn't dragged down sales, said Sowmyanarayan Sampath, head of Verizon's consumer division, partly because prepaid customers are upgrading to more premium plans. 'We're gaining on the higher end of prepaid, which is why we are seeing strong performance despite low immigration in those segments,' he said. First-quarter operating revenue increased to $33.5 billion, topping the $33.3 billion average of estimates. Adjusted earnings were $1.19 a share, beating projections for $1.15. The company reaffirmed all guidance for the year, including adjusted growth of 2% to 3.5% in earnings before interest, taxes, depreciation and amortization. Vestberg noted that the first quarter's adjusted Ebitda of $12.6 billion is the company's 'highest reported result ever.' Broadband continued to be a bright spot for the company, with Verizon adding 339,000 internet customers. Verizon and its peers have been siphoning market share from cable companies by offering fiber connections and home wireless service powered by their 5G networks and bundled with their mobile plans and content packages. Verizon's pending acquisition of Frontier Communications Parent Inc., would expand its fiber footprint. 'This transaction will help enable a long-term goal of offering broadband to over 100 million premises, including fiber passings of 35 million to 40 million,' Sampath said. Frontier has said it expects the transaction to close in the first quarter of 2026. Verizon is the first of the big three US telecom companies to report first-quarter results. AT&T publishes on Wednesday and T-Mobile follows on Thursday. Verizon shares slid 1.8% Tuesday morning in New York. With assistance from Keith Gerstein. This article was generated from an automated news agency feed without modifications to text. First Published: 22 Apr 2025, 09:20 PM IST
Mint
22-04-2025
- Business
- Mint
Verizon Loses More Subscribers Than Expected
(Bloomberg) -- Verizon Communications Inc. reported a larger-than-expected decline in mobile-phone subscribers in the first quarter, the result of heavy competition and less spending by government agencies. The largest US wireless provider recorded a loss of 289,000 monthly phone subscribers, according to a statement Tuesday, more than the 185,500 loss estimated by analysts on average. That's a significant reversal from the 568,000 subscribers added in the fourth quarter and more than double the decline recorded at the same point last year. Verizon attributed some of the loss to reductions at some federal agencies, as the Trump administration moves to slash thousands of jobs. 'We saw some impact of the new government and their efficiency work,' Chief Executive Officer Hans Vestberg told analysts on a call. Verizon, AT&T Inc. and T-Mobile US Inc. are locked in a tight race to win customers in a saturated market. Last month, Verizon Chief Revenue Officer Frank Boulben warned that subscriber numbers were 'probably going to be soft' due to an 'elevated level of competitive intensity.' After the Christmas holiday, Verizon ended its seasonal promotions, while rivals didn't, he said. Customers also are keeping their phones longer. The company has increased monthly rates and fees over the past few years to boost revenue, which has been little changed for the last five quarters. To woo new subscribers and to keep current customers from leaving, Verizon this month promised a three-year price guarantee and a free phone trade-in for mobile-phone and home-internet plans. The quarter's net losses 'reflect the impact of recent pricing actions,' Chief Financial Officer Tony Skiadas told analysts on Tuesday, but he said the company still 'exited the first quarter with positive momentum.' If prices of mobile handsets increase in the months ahead under tariffs on US imports imposed by President Donald Trump, Vestberg said consumers would be the ones to pay the price. 'We will continue to be financially disciplined in whatever promotions we have, but we will not cover any enormous increase on tariffs on handsets,' Vestberg told analysts on the call. 'That's ultimately going to be passed on to consumers.' Verizon and its peers are so far 'largely shielded by their US focus and utility-like models' from negative impacts of the tariffs, according to Bloomberg Intelligence. The companies could experience longer-term effects, like customers downgrading from premium phone plans, the analysts wrote. In the shorter term, the companies will see a 'stable to slight increase in the handset replacement rate as there was an uptick in consumers buying handsets ahead of the tariffs,' Roger Entner, an analyst at Recon Analytics, said in an email. Verizon didn't record a gain in device sales in the first quarter, but expects the rate to climb later this year. A decline in immigration rates, which typically drive a portion of new customer growth, hasn't dragged down sales, said Sowmyanarayan Sampath, head of Verizon's consumer division, partly because prepaid customers are upgrading to more premium plans. 'We're gaining on the higher end of prepaid, which is why we are seeing strong performance despite low immigration in those segments,' he said. First-quarter operating revenue increased to $33.5 billion, topping the $33.3 billion average of estimates. Adjusted earnings were $1.19 a share, beating projections for $1.15. The company reaffirmed all guidance for the year, including adjusted growth of 2% to 3.5% in earnings before interest, taxes, depreciation and amortization. Vestberg noted that the first quarter's adjusted Ebitda of $12.6 billion is the company's 'highest reported result ever.' Broadband continued to be a bright spot for the company, with Verizon adding 339,000 internet customers. Verizon and its peers have been siphoning market share from cable companies by offering fiber connections and home wireless service powered by their 5G networks and bundled with their mobile plans and content packages. Verizon is the first of the big three US telecom companies to report first-quarter results. AT&T publishes on Wednesday and T-Mobile follows on Thursday. Verizon shares slid 1.8% Tuesday morning in New York. --With assistance from Keith Gerstein. (Corrects EPS number in 12th paragraph.) More stories like this are available on First Published: 22 Apr 2025, 09:20 PM IST
Trade Arabia
03-03-2025
- Business
- Trade Arabia
Cisco partners with Nvidia to boost AI adoption in enterprises
Cisco has announced plans for an expanded partnership with Nvidia to provide AI technology solutions to enterprises. Enterprises recognize that AI is essential to growth but remain early in their adoption as they navigate the unique technical complexity and security demands of operating AI-ready data centers. The expanded partnership aims to give organizations flexibility and choice as they look to meet the demand of AI workloads for high-performance, low-latency, highly power-efficient connectivity within – and between – data centers, clouds, and users. "A robust and scalable AI ecosystem is key to driving the transformative power of AI," remarked Hans Vestberg, the Chairman and CEO of Verizon. "This expanded partnership between Cisco and Nvidia, just like our Verizon AI Connect strategy and solutions, builds towards accelerating and enabling resource-intensive AI workloads at the Edge of the network," stated Vestberg. The Nvidia Spectrum-X Ethernet networking platform based on Cisco and Nvidia silicon will form the foundation for many enterprise AI workloads. Cisco said by enabling interoperability between both companies' networking architectures, the two companies are prioritizing customers' needs for simplified, full-stack solutions. The goal of the expanded partnership is to allow customers to optimize their AI infrastructure investments with a common architecture, using their existing management tools and processes, spanning front and back-end networks, it stated. "Enterprises are under immense pressure to deploy AI quickly and effectively, and many leaders struggle to justify the investment while balancing the risks," remarked Chuck Robbins, Chair and CEO, Cisco. "Together, Cisco and NVIDIA are partnering to remove barriers for customers and ensure they can optimize their infrastructure investments to unlock the power of AI," he added. "Advancing at lightspeed, AI will revolutionise every industry," stated Jensen Huang, founder and CEO of Nvidia. "Nvidia Spectrum-X is Ethernet enhanced and supercharged for AI. Together with Cisco's enterprise platforms and global reach, we can help companies worldwide build state-of-the-art NVIDIA infrastructure as they race to transform with AI," he noted. Jim Kavanaugh, Co-Founder and CEO, World Wide Technology, pointed out that its long-standing partnerships with Cisco and Nvidia has already resulted in cutting-edge AI solutions that drive innovation and business transformation.
