Please ensure Javascript is enabled for purposes of website accessibility

Verizon Struggles With First Decline in Wireless Subscribers

By Motley Fool Staff - Apr 26, 2017 at 6:21AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite its dominant position in the industry, the company cannot remain complacent for long.

In this segment from Motley Fool Money, the team considers the state of the wireless business in the U.S.

No. 1 player Verizon (VZ -2.17%) saw its number of subscribers shrink last quarter, and based on numbers from the past several years, it appears consumers are happily switching to the more competitive services of T-Mobile (TMUS 0.84%), and to a lesser degree, Sprint

A full transcript follows the video.

This video was recorded on April 21, 2017.

Chris Hill: For the first time ever, Verizon reported a quarterly loss. David, I'm sure there are other things of note in their first quarter report but a loss?

David Kretzmann: Yeah. It was their first-ever quarterly decline of wireless subscribers. So, they're finally, I think, feeling some pressure from T-Mobile and Sprint. But I think T-Mobile deserves a lot of the credit here. T-Mobile has really been aggressively going after Verizon and AT&T. Since 2013, the number of wireless subscribers with T-Mobile has grown from 44 million to over 71 million today. Verizon has 145 million, so they're still in that lead position. But I think they might be getting a little bit complacent here, and I think there is room for T-Mobile to disrupt Verizon and continue to gain some share. There was a recent spectrum auction with the FCC, essentially, where companies like Verizon, AT&T, and T-Mobile can bid on that spectrum from the FCC to grow their networks and grow the amount of data they can process and the speeds and so forth. T-Mobile spent nearly $8 billion for 45% of the available spectrum in that auction. AT&T did $900 million. Verizon didn't bid anything, they didn't bid for any of the available spectrum. For me, that signifies it. Maybe Verizon is a little bit complacent here. That leaves a lot of room for T-Mobile to boost the speed and capacity of their network. I like the position that T-Mobile is in. Over the past year, T-Mobile shares are up 61%, Verizon down 4%.

Hill: Is there a CEO in the public market that's more entertaining on Twitter than T-Mobile CEO John Legere? The way he just aggressively trolls, in particular, Verizon?

Kretzmann: Somehow he worked #verHIGHzon into one of his tweets going after Verizon CFO, he said, "Stop gouging your customers and start doing more for them! Seriously, how #verHIGHzon are you?!?"

Jason Moser: He actually sent that out on 4/20, too, right? April 20th? There you go.

Kretzmann: The man's brilliance just compounds.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$50.96 (-2.17%) $-1.13
T-Mobile US, Inc. Stock Quote
T-Mobile US, Inc.
$137.08 (0.84%) $1.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.