Time for Verizon to Change or Fold
Customers change phone service all the time. But for Verizon, the country’s largest wireless provider, the losses are starting to mount. At one point, Verizon lost 400k subscribers in 6 weeks. As a result, the wireless provider brought back its popular unlimited data plan. Yet, even with that, Verizon still lost 289k subscribers afterwards.
Is This the Beginning of the End for Verizon?
Verizon owns the title of the largest US wireless provider, with 114 million wireless connections. Of those, the majority come from postpaid, or contract smartphones. And as a result, it seems like Verizon was immune to competition. Rivals such as AT&T and Sprint launched unlimited usage plans, and T-Mobile went all in on unlimited data, making that the only option for customers. Verizon, meanwhile, insisted customers weren’t interested in unlimited data plans and insisted 5 gigabytes of data was all anyone needed.
Then Verizon started bleeding customers. 400,000 customers to be exact. In six weeks.That led to Verizon quietly bringing back unlimited data in February for the first time since 2010. And while that slowed the losses, Verizon still lost more customers in Q1 than ever before. Verizon may be losing customers, but T-Mobile has been gaining steam the last few years and adding new subscribers by the millions. While only having about half the total customer base of Verizon, T-Mobile is aggressively expanding, with plans to open 1,000 new stores this year, along with 1,500 MetroPCS stores. More importantly, however, is that T-Mobile focuses on what their customers want, rather than what the company wants to give them.
T-Mobile invests in technology and offerings that improve their customers’ user experience, while Verizon customers utilize internet connections on an older DSL network, making for a slower connection. Even with unlimited data, Verizon customers who use the network most will find that they’ll still have unlimited usage, but at slower speeds.
Get to know more about the wireless company with this video from Verizon:
That’s why T-Mobile stock has continued to steadily climb, while shares of Verizon have trended in the opposite direction. And unless Verizon changes its philosophy, those trends should continue. Expect shares of Verizon Communications, Inc. (VZ) to continue DOWN while T-Mobile US, Inc. (TMUS) should continue its rise UP.
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