Verizon Wireless pointed to a continued decline in its retail postpaid churn rate as evidence that cut-rate service plans and other marketing efforts by rivals T-Mobile and Sprint aren’t stealing its customers.
In its fourth-quarter earnings report, Verizon said it reduced postpaid churn to 0.96 percent from the year-ago 1.14 percent, with full-year churn falling to 0.96 percent from 1.04 percent.
Despite the “rhetoric” of other carriers, Verizon “port-outs are down year over year,” said executive VP/CFO Fran Shammo.
Verizon also continued to post subscriber gains in the quarter and year, through the gains are down from the year-ago periods, the carrier also reported.
Verizon gained 1.52 million retail postpaid net subscriptions in the fourth quarter. Most, however, came from net tablet additions, not more profitable smartphone additions. The company posted 960,000 tablet net adds while the number of net postpaid-phone subscriptions grew by 449,000.
Postpaid net adds in the quarter were down 23.5 percent compared to the year-ago quarter. For the year, retail postpaid net adds were down 17.8 percent to 4.51 million.
Total retail net adds, consisting of both postpaid and prepaid net adds, hit 1.36 million in the quarter, down 34.1 percent from the year-ago period. For the full year, total retail net adds hit 3.96 million, down 29 percent.
The statistics exclude wholesale subscriptions through MVNOs and IoT connections.
Handset upgrade pace: In other trends, Verizon said only 67 percent of postpaid phone activations in the quarter were on installment-payment plans, lower than the forecast 70 percent, in part because handset-upgrade growth slowed in 2015 from 2014. In 2014, said Shammo, the first big-screen iPhones debuted, and other handset companies introduced more innovation than in 2015. In the first quarter, Shammo forecasts the installment-plan uptake rate will exceed 70 percent.
Shammo also said it’s too early to tell if Verizon’s shift away from subsidizing phones is prompting consumers to keep their phones longer.
More than 40 percent of Verizon’s postpaid-phone subscribers are using unsubsidized phones, up from the third quarter’s 30 percent, and about
29 percent of the carrier’s postpaid-phone subscribers are on installment-payment plans.