Verizon Earnings Fall Short as Company Confirms $30 Unlimited Data Plan for iPhone
Verizon’s earnings report on Tuesday was closely watched, in large part for any hints about the impending arrival of the iPhone to the company’s wireless service.
The numbers themselves were lackluster, with Verizon Communications reporting per-share earnings, excluding pension and other items, of 54 cents on revenue of $26.4 billion. The earnings were a penny short of expectations, Bloomberg said, with revenue about in line with what analysts predicted. After initially dipping, Verizon shares were trading recently at $36.35, up about 3 percent.
Once again, though, much attention focused on the Verizon iPhone, which goes on sale next month.
Ahead of the company’s earnings conference call, Verizon Chief Operating Officer Lowell McAdam told The Wall Street Journal that the company would offer a $30 unlimited data plan, similar to what it offers for other phones.
“I’m not going to shoot myself in the foot,” he told the Journal. AT&T used to offer a similar plan, but switched to usage-based pricing for new customers last year; plenty of the subscribers that Verizon is courting, however, have been able to keep their unlimited plan with AT&T.
Verizon has announced it will sell the iPhone at prices similar to what AT&T charges for the iPhone, so its service pricing has been one of the big remaining unknowns. Verizon is also likely to charge an extra fee for customers who want to take advantage of the device’s ability to act as a wireless hotspot. AT&T’s iPhone doesn’t have such a feature.
The iPhone also impacted Verizon in other ways last quarter, McAdam said, noting that it appeared to hold back subscriber growth, although the company did add some 870,000 new customers.
“It wasn’t what I hoped it would be,” he told the Journal.
Verizon’s earnings report suggests an opportunity to sell some iPhones to its existing customer base; only about a quarter of its contract subscribers have smartphones.
The company said it expects that, with the addition of the iPhone and devices running on its new LTE network it expects that number to roughly double this year, with smartphone penetration accounting for more than half of customers by year-end.