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Verizon and Q4: What’s in store?

Given Verizon’s track record in consumer postpaid phone net adds so far this year, all eyes are on how it’s going to finish out the year.

After all, the fourth quarter is historically where wireless carriers make their bread and butter. If they don’t post net adds in the fourth quarter, they’re really in trouble.

For the past several quarters, Verizon has been losing consumer postpaid phone customers.

But it’s able to report positive net phone additions thanks to its business group. For example, in the third quarter, it lost 189,000 customers in the consumer segment. That was offset by additions in the business segment, resulting in total postpaid phone net adds of 8,000.

The big question is: Will Verizon’s consumer unit turn the ship around for the all-important fourth quarter?

Analysts aren’t so sure.

“I don’t know what they can do,” said Jeff Moore, principal at Wave7 Research. “They need to develop a better sales culture at Verizon. They don’t have the interest in selling that other carriers have… the shorter store hours, their declining store footprint,” with exits at Target and Sam’s Clubs.

For example, he recently walked into a Sam’s Club and was immediately approached by two people aggressively pitching AT&T offers. “Verizon just doesn’t have that kind sales culture,” Moore said.

But once again, the expectation is the Business segment, led since July by Sowmyanarayan Sampath, will make up for losses in the Consumer Group. Manon Brouillette has led the consumer segment since the beginning of 2022.

“Verizon is clearly struggling in postpaid throughout the 2022 year. There will be postpaid net additions as their business unit sometimes boosts the total postpaid tally. Alas consumer revenue drives the overall business at >$18B a quarter,” said William Ho, principal analyst at 556 Ventures.

FWA for the win?

Fixed wireless access (FWA), which uses the same network as mobile services, is seen as a bright spot for Verizon in both the consumer and business segments. Verizon and T-Mobile are adding FWA subscribers in areas where they previously didn’t, although T-Mobile’s target of adding 7 million to 8 million FWA customers by 2024 is more ambitious than Verizon’s target of 4 million to 5 million by the end of 2025.

“I expect that Verizon’s FWA will contribute as it’s on an upward trajectory,” Ho said. “But everyone’s question is the phone net add question. Given today’s T-Mobile aggressive 4 lines/$100 promo, it’s timely for the price sensitive at AT&T and Verizon.”

No 'magic' in sight

Mark Lowenstein, managing director at Mobile Ecosystem, said he doesn’t see any “magical solution” for Verizon turning things around in the fourth quarter.

“T-Mobile has already announced some pretty aggressive Black Friday/holiday offers, and I don't think Verizon will go too much further down the discount rabbit hole,” Lowenstein told Fierce. “I think Verizon has its sights on the first half of 2023, with greater focus on its prepaid brands (finally!), and some aggressive marketing as C-band becomes available much more widely.”

Asked to comment on how Verizon’s going to turn the trajectory around in the fourth quarter and Verizon’s offers during the holidays, a spokesperson in Verizon’s Consumer Group pointed to its current holiday offers here, and said it will be announcing new deals throughout the holiday season. Presumably, Verizon will adjust plans as it sees fit throughout the sales cycle.

In other words: Stay tuned.

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