Verizon Adds Subscribers, Expects Disney Deal to Help -- WSJ
2019年10月26日 - 04:02PM
Dow Jones News
By Sarah Krouse
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 26, 2019).
Verizon Communications Inc. notched large gains in phone
subscribers in the third quarter, aided by a revamp of its
unlimited data plans that shaved about $5 off customers' monthly
bills.
The carrier said it added 444,000 net new postpaid phone
connections during the period, compared with 295,000 additions a
year earlier. The latest figure handily exceeded a consensus
analyst estimate of about 300,000.
Postpaid customers are considered lucrative for carriers because
those subscribers typically pay up monthly under longer-term
contracts.
Verizon finance chief Matt Ellis said the subscriber momentum
had continued into the current quarter and that additional
customers should come from the recently announced partnership with
Walt Disney Co. that will give people on unlimited data plans a
year of free access to the new Disney+ streaming service.
Wireless promotional activity picked up during the period, which
included the launch of Apple Inc.'s iPhone 11. Carriers rolled out
buy-one-get-one-free offers and other deals in September.
Americans' cellphone bills are falling as carriers compete for
customers in a saturated market and as cable companies offer
lower-cost competing services. In September, the consumer-price
index for wireless phone service -- an indicator of current offers
from providers -- fell 2.8% from a year earlier, the 13th straight
month of declines, according to the Labor Department.
Carriers are also increasingly offering such perks as video and
music streaming.
Verizon, the largest U.S. carrier by subscribers, is the first
big wireless company to report earnings for the third quarter.
AT&T Inc. and T-Mobile US Inc. are scheduled to release their
results Oct. 28. Sprint Corp. hasn't yet announced a date.
Verizon is trying to convince Wall Street that it can be more
than a connectivity pipe and can find ways to monetize the 5G
service it is rolling out. Early reviews of the service have been
mixed -- it is ultrafast but has a limited reach.
The company said Friday it would bring 5G service to Omaha and
Dallas for a total of 15 cities so far this year. Its target is 30
cities by year end and it said it was on track to meet that
goal.
Meanwhile, the company is trying to shed costs, aiming to cut
$10 billion by 2021. It said it has achieved $4.6 billion in
savings since last year.
Verizon has largely balked at buying into Hollywood production
or directly competing in the streaming wars as AT&T has, opting
instead to form partnerships with content providers.
Verizon's Disney+ offer, which gives Disney a large pool of
potential viewers as it launches, could help the Verizon retain
current customers and draw more subscribers to its unlimited plans,
a priority for the company.
Hans Vestberg, the carrier's chief executive, cited the
agreement as the model of partnering with top brands that Verizon
had decided to pursue.
UBS Group AG analysts estimate that there are about 17 million
Verizon wireless customer accounts eligible for the free Disney+
offer. The streaming service, which would normally cost $6.99 a
month, is scheduled to launch Nov. 12.
AT&T is working on its own streaming video service called
HBO Max that it plans to unveil next week and formally launch next
year. AT&T has aggressively pursued content ownership and
creation and is in the throes of a battle with activist Elliott
Management over its strategy.
Verizon reported 118.65 million wireless connections, including
tablets, smartwatches and other devices, up from 118.12 million at
the end of June.
About half of its wireless customers are now on unlimited plans,
executives said, an increase from just below that threshold in the
preceding quarter. Verizon is trying to move more of its customer
base to unlimited plans, hoping that subscribers will move up
through its tiers of service over time.
Verizon's cable offering, Fios video service, continued to lose
customers. with 67,000 departing in the third quarter.
Overall, net income attributable to the company was $5.19
billion, up from $4.92 billion in 2018's third quarter. Revenue
edged up to $32.9 billion from $32.6 billion.
Revenue within Verizon's media unit, which includes the Yahoo
and AOL properties it acquired, was $1.8 billion, down 2% from a
year earlier.
Write to Sarah Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
October 26, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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