It is likely that Verizon will see steeper decreases in quarterly wireless service revenues in the second quarter of 2017, according to the banking firm Barclays. The decrease in the quarterly service revenues is related to the carrier’s launching of its unlimited data plans, which Verizon deemed necessary after it lost postpaid subscribers in the first quarter of 2017. As a result, Barclays estimates that the revenues of the company will decrease by as much as 7.2 percent this quarter, a steeper decrease compared to the 6.1 percent revenue reduction in the first quarter of 2017. Verizon itself expects that the company will see reduced wireless revenues until next year, as the company has to compromise with reduced average revenue per user (ARPU) in order to retain its postpaid subscribers. In the previous quarter, Verizon lost more than 280,000 postpaid subscribers, most of which went to smaller national carriers T-Mobile and Sprint.
While the launching of unlimited plans may have caused reduced revenues in the short term, it at least stemmed the exodus of Verizon’s postpaid subscribers. As it continues to attract subscribers back to its network through its unlimited plans, the carrier also aims to win back consumers by emphasizing the reliability and speed of its network. Verizon has long banked on its wireless network as one of the major reasons why subscribers should stay with the carrier. However, it has been recently challenged by T-Mobile, which claims that the launching of unlimited plans have negatively affected the quality of service that Verizon offers to its consumers. In addition, recent tests have shown that both T-Mobile and AT&T are not far behind Verizon in terms of the data speeds and reliability provided by its networks.
However, it is clear that Verizon is not resting on its laurels, with the carrier continuously improving its infrastructure. Recently, Verizon stated that it will utilize additional spectrum in certain locations in order to maintain the data speeds offered by its LTE networks despite the increased data traffic. In addition, the carrier is also improving its network backhaul in preparation for the increased data traffic due to the deployment of LTE-Advanced and 5G technologies. Last month, Verizon announced that it will purchase at least $1.0 billion worth of fiber-optic cables and related hardware for industrial components manufacturer Corning.