The One Number That Shows Trouble At Verizon

Verizon lost 398,000 wireless customers in the first six weeks of the year, though it reversed the trend by offering an unlimited plan. Photo: Eric Thayer/Getty Images

It’s now clear why Verizon suddenly decided to offer an unlimited plan in February. The company had no choice.

Verizon lost 398,000 wireless customers in the first half of its latest quarter, the company said in its earnings report this week. Once Verizon turned on its unlimited plan, the bleeding stopped. After the mid-February unlimited launch, Verizon managed to add 109,000 of its high-value subscribers -- a category the company refers to as “retail postpaid phone connections.”

“We introduced the unlimited offering primarily to protect our high-quality base,” Verizon’s CFO Matthew Ellis told investors during a conference call on Thursday.

Those customers have been attracted to the unlimited offerings at rival T-Mobile, Sprint, and AT&T, so Verizon realized it, too, had to play ball.

When it comes to pricing, the wireless carriers have been in a race to the bottom. That remains a positive for consumers. But, as corporate profits fall, shareholders are going to revolt.

Verizon shares are already down 11% this year and AT&T is down 6%. Investors have viewed upstart T-Mobile as a beneficiary of the pricing war; its shares are up 13% in 2017. At some point, the competition will likely weigh on its shares too.