Yesterday, Verizon Wireless announced their Q1 earnings. All in all, Verizon did pretty well. Adding over half a million postpaid customers, but they did lose about 138,000 customers. During their quarterly earnings conference call yesterday, Verizon’s CFO Fran Shammo stated “If the customer who is just price-sensitive and does not care about the quality of the network – or is sufficient with just paying a lower price – that’s probably the customer we’re not going to be able to keep.” So basically, Verizon isn’t even going to try and keep their customers?
Currently all of the US carriers are engaged in a pricing war, mostly started by T-Mobile, but really fueled when Marcelo Claure took over Sprint last year. Since then, Sprint and T-Mobile have lowered their prices and have been in a massive price war, with AT&T quietly changing their prices, and Verizon sometimes changing theirs. According to some reports, the average revenue per user has dropped 4% across all four carriers in the US, as of the fourth quarter of 2014.
It seems that Verizon is more focused on rolling out their XLTE network, which allows for faster download speeds in larger and high trafficked areas. Which is definitely something they should be working on, as should the other three carriers. They are also investing a ton into their network, over $2 billion invested here in Michigan in the last decade. While Sprint and T-Mobile are more interested in adding more customers, Verizon is more interested in providing a better network. Which isn’t surprising, especially when Verizon has nearly three times the number of customers of those two carriers. Verizon is also working on adding more services, like their new video service, which we are expecting to launch sometime this summer or perhaps closer to the end of the year.
While it’s kind of crazy to hear those words coming out of Fran Shammo’s mouth, I can see where’s he’s coming from. Verizon is more interested in keeping the best network, then trying to keep every single customer on their network. He’s also probably betting on the fact that T-Mobile and Sprint both have a slower network with less coverage than Verizon, and figuring those customers will be back.