Verizon continues to focus on upgrading its 5G network. Things will need to accelerate from the first three months of 2022 for Verizon to meet the lofty revenue and profit targets it unveiled at its March investor day.
On Friday morning, Verizon reported first-quarter earnings per share of $1.35 after adjusting for one-time factors. The company reported revenue of $33.6 billion.
Displays on a smartphone and the logo of Verizon Communications Inc.
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Verizon is showing a slightly different discount policy than its biggest competitors T-Mobile US and AT&T. Instead of discounts, the company is slightly raising the price of its tariffs, but in return, it is offering and selling more services to its subscribers. Thus, it’s more about some more comprehensive offerings to make up for the higher price.
However, these moves have seen the company lose almost 300 000 subscribers in the first quarter of this year. By comparison, AT&T gained 965 000 new subscribers to its service.
Will Verizon’s higher price compensate for the loss of subscribers?
Whether or not this slightly different approach will ultimately be better for the company remains to be seen. Verizon’s outlook calls for revenue growth of about 3% this year and next, accelerating to at least 4% in 2024 and beyond. This would increase revenues from $110 billion in 2021 to approximately $124 billion in 2025. From these projections, we can see that even if users decline, the company should be able to compensate by increasing sales of its services to existing clients and acquiring new ones.
However, in this sector, much of the success is now down to the speed of development and the extent of 5G network upgrades. This is where rival AT&T has let it be heard that after cutting out its media arm in the form of Warner Bros. they will be back with a greater focus on developing 5G networks. So we’re going to see a lot of competition on the wireless networking front.
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