Verizon Struggles to Add Contract Customers
Verizon Communications Inc.’s (VZ) first-quarter earnings plunged, hurt by a health-care-related charge, as more wireless customers shunned the practice of signing a long-term contract.
Verizon Wireless’s usual bread-and-butter—so-called post-paid subscribers willing to spend more each month and stick with the service–failed to show up during the period. For the first time, the carrier had to rely on reseller partners who sign up lower-end prepaid customers to offset a 67% decline in the number of new contract customers.
The struggles of the country’s largest wireless carrier underscore a growing dilemma facing an industry traditionally dependent on adding lucrative contract customers.