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Verizon’s Profit Falls By 23% As It Looses Customers After Hiking Price Of Plans

Verizon’s Profit Falls By 23% As It Looses Customers After Hiking Price Of Plans
On Friday, Verizon Communications Inc reported a 23 per cent drop in ts profits for the third quarter while also missing estimates of the market for the addition of new customers for its wireless services, even as several existing consumers switched to less costly plans from competitors AT&T Inc and T-Mobile US Inc.
Verizon lost 189,000 customers who were paying monthly bills regularly in its consumer business in the third quarter after raising prices for its plans in June via extra charges on top of its already-expensive plans.
According to finance chief Matt Ellis, the company gained from a 1 per cent rise in gross wireless additions (in consumer business in the quarter, but this was offset by "an increase in disconnects as we had some customers disconnect as a result of the pricing actions that we took."
Verizon added 8,000 net new monthly bill paying wireless phone subscribers in the third quarter, falling far short of Factset's estimate of 35,400 additions.
Customers' discretionary spending is being squeezed as the cost of living rises, putting pressure on telecom companies to keep their plans affordable.
This, combined with higher costs associated with heavy investment in 5G technology and rising competition to retain high-paying subscribers, has harmed Verizon, which has been adding fewer subscribers than its competitors.
The carrier's net income fell 23.3 per cent to $5 billion in the third quarter. Earnings per share after adjustments were $1.32.
According to Refinitiv data, total revenue increased 4% to $34.2 billion, exceeding expectations of $33.78 billion.

Christopher J. Mitchell

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