Verizon Surprises with Rise in Wireless Subscribers as 5G Pays Off
July 25, 2023: Verizon Communications (VZ.N) has pleasantly surprised investors by adding more wireless subscribers in the second quarter. This unexpected boost comes as users upgrade their mobile phones to access the company’s high-speed 5G network. As a result, Verizon’s shares climbed nearly 3% in premarket trading.
The telecom giant has been aggressively expanding its 5G network across the United States, aiming to gain a competitive edge over rivals like T-Mobile in a fiercely competitive market.
In Q2, Verizon added a net of 8,000 monthly bill-paying wireless phone subscribers, which was much better than analysts’ estimates, predicting a loss of 11,000 subscribers. This growth is crucial for the company, especially as it faces challenges from competitors offering more affordable plans.
Verizon’s strong focus on 5G technology has paid off, attracting customers who want to experience the benefits of super-fast connectivity. The company’s investment in 5G has also positioned it to provide fixed wireless access, driving a substantial increase in broadband additions – the largest in over a decade. Total broadband net additions reached 437,000, including 393,000 fixed wireless net additions and 67,000 Fios Internet net additions.
Moreover, Verizon’s solid performance is reflected in its free cash flow, which exceeded analysts’ expectations at $8 billion. Investors closely monitor free cash flow as it plays a significant role in determining dividend payouts.
While total revenue saw a 3.5% decline to $32.6 billion, Verizon remains optimistic about its future profitability, maintaining its profit forecast of $4.55 to $4.85 per share for 2023. Wireless service revenue is also expected to grow between 2.5% and 4.5% in 2023, showing the company’s confidence in its continued growth.
Overall, Verizon’s strategic focus on expanding its 5G network and providing superior network experiences is paying off, allowing the company to navigate a competitive market successfully.