Not only has Verizon (VZ) lost it’s once spokesperson to a competitor but they are now also losing potential customers to more enticing offers from Sprint and T-mobile.
Today Verizon Wireless recorded a 6.7 percent decline in its third-quarter revenues, its third consecutive quarter of declining revenues.
The communications and media company’s $30.9 billion in third quarter revenues is $1.81 billion behind its pre-quarter estimates of $31.09 billion.
Verizon reported 442,000 postpaid retail additions in Q3, this is a 28 percent decrease from its Q2 retail postpaid net additions of 615,000. Total wireless service revenues also declined 5.2 percent compared to Q3 numbers from a year ago.
The cell phone and growing media giant further reported a .10 backslide in net income to .89 in comparison to September 2015. So even though earnings of $1.01 are up +0.02 in this third quarter of $1.01 beat EPS expectations of .99 cents, who is to blame for revenue decline?
“If you rank the most annoying things that you have to pay for cell phones are high on your list, said Greg Portell, head of communications, media, and technology at consulting firm ATKearney. “Now with the plethora opportunities for Verizon, it is less about the acquisition and more about getting people to choose your product or service over the competitors.”
Competitor Sprint (S) in the second quarter boosted their postpaid additions to 173,000. T-mobile (TMU) claimed 646,000 branded postpaid phone net adds at the time of their Q2 earning report. This growth in branded post paid net adds for the tenth straight quarter was heavily due to their new unlimited data plan, T-mobile Customer Appreciation Tuesdays and free international data for the rest of 2016 offers. T-mobile has also been pleased by revenues and earning per share in the green for the past two quarters.
Regardless of these stellar numbers, some analysts doubt T-mobile or Sprint can keep the momentum necessary to compete with the Verizon powerhouse.
“This level of competition between these two carriers is not sustainable, said Alex Zhao, equity research analyst at Morningstar. “Investors should have a long-term view of carriers and it will become more about carriers becoming carriers of connectivity.”
Analysts highly anticipate Verizon to use its majority control of the wireless industry and network quality to dominate after the finalization of the Yahoo deal.
Verizon ended the third quarter up 2.6 percent from this time last year with 113.7 million retail connections. Growth in connections and revenues and an estimate that 2016 adjusted earnings will be at a level comparable to 2015 leaves the company optimistic going into the fourth quarter.