Verizon grows wireless service revenue, loses 178K phone subs in Q1

Verizon reported net losses for postpaid subscribers in the first quarter of 2021, alongside total wireless service revenue growth of 2.4% compared to a year ago.

The first quarter of 2020 had been the first time impacts of Covid-19 started making their way into earnings, as carriers including Verizon closed retail stores, roaming declined and switching activity was down.

Roughly one year later and Verizon said nearly 100% of its retail stores had reopened in March, leading to positive phone net adds for the month and momentum leading into Q2.

“Verizon is off to an excellent start in 2021 as we met the challenge of intense competition in the first quarter by achieving revenue growth across our three business segments," said Verizon Chairman and CEO Hans Vestberg in a statement. “This year began with a transformative milestone for our company with our success in the recent C-Band spectrum auction. We continue to strengthen our networks, execute on our Network-as-a-Service strategy and focus on the five vectors that underpin our growth framework and position us to deliver success in 2021 and beyond.”

In Q1 2021, Verizon recorded 170,000 retail postpaid net losses, including 178,00 net phone losses. That compares to 68,000 net phone losses a year ago.

First quarter results showed 360,000 net postpaid losses on the consumer side, including 250,000 net phone losses.

Verizon’s prepaid tally ticked up slightly, with 19,000 net additions. That stands to expand greatly if Verizon completes a planned acquisition of TracFone, which counts around 21 million prepaid subscribers.

Its business segment saw subscriber gains, adding 47,000 net phones for total 156,000 net postpaid adds in the group. It’s still much lower than the 239,000 net phone additions Verizon’s business group posted in Q1 2020.

While Verizon reported losses on the subscriber metric sides, the first quarter saw revenues rise for both business and consumer groups.

Total wireless service revenue grew to $16.7 billion in the first quarter. Verizon attributed a 1.5% bump in consumer wireless service revenue, which was $13.7 billion, to the continued adoption of unlimited and premium unlimited plans. Business service revenues were up 6.2% to $3.1 billion.

Overall wireless equipment revenue was up 19.7% to $4.94 billion, alongside an uptick in upgrade rates. Upgrade rates of 4.3% were reported in Q1, versus us 3.7% in the same quarter a year ago.

Verizon also saw churn decline slightly since last year. Retail postpaid churn was 1.03% and postpaid phone churn was 0.81% in the first quarter.

For the full year ahead, Verizon expects total wireless service revenue growth to be at least 3%, with capital spending between $17.5 billion and $18.5 billion. Additionally, it expects to spend between $2 billion and $3 billion to deploy C-band for 5G in 2021.