The U.S. wireless market is about to get a simultaneous tie-up and shake-up, but for now Verizon (NYSE:VZ) sits atop it all. Its second-quarter 2019 revenue was down 0.4%, but adjusted earnings increased 2.5% due to an increase in both subscribers and average service revenue per subscriber -- a modest yet solid performance for the telecom giant.  

Meanwhile, the battle over next-gen 5G wireless services is only just beginning to heat up. Verizon got off to an early but narrow lead, but the network provider still looks like a solid bet for income investors in this period of transition.

Fighting to maintain lead

Verizon's net postpaid wireless subscribers increased 451,000 in the second quarter after a not-uncommon sluggish start to the year. Year to date, the network giant has put together a more-than-respectable performance, given the general slowdown in new wireless subscribers available to be won and in spite of ever-present competition. T-Mobile (NASDAQ:TMUS) and its soon-to-be-absorbed peer Sprint (NYSE:S) continue to chip away at the lead, but Verizon's wide margin over both of them and No. 2 rival AT&T (NYSE:T) nevertheless remains safely intact for now.




T-Mobile US


Total net retail postpaid subscriber additions (first half of 2019)



2.1 million


Total retail postpaid subscribers (end of Q2 2019)

114 million

76.3 million

39.1 million

33.1 million

Data source: Verizon, AT&T, T-Mobile, and Sprint.

In other, less glorious, news, Verizon's media division (made up of AOL, Yahoo!, and other patched-together legacy internet sites) slouched another 2.9% year over year and brought in just $1.8 billion -- although it was an improvement over the 7.2% decline in Q1. Don't get too excited, though, as Verizon has been scaling back on that segment for some time. Total debt fell again to $104.6 billion (it was $105.9 billion to start the year) and free cash flow over the last 12 months is now up 12% to $16.5 billion.  

A woman standing on a bridge using a smartphone with a city skyline in the background.

Image source: Verizon.

Next-gen services taking shape

Along with second-quarter results, Verizon also announced that its 5G mobile service rolled out to an additional four cities (Washington, D.C., Atlanta; Detroit; and Indianapolis), bringing the total count up to nine. That number doesn't include four cities where a 5G broadband internet service -- dubbed 5G Home -- is available.

While Verizon got off the line first in the 5G race and continues to be the dominant force in the current 4G standard, 5G has quickly become an open field. AT&T's 5G is currently available in parts of 19 cities, T-Mobile's in six, and Sprint's in five. The pending merger between T-Mobile and Sprint could be a particularly potent combination in new network build-out, as it will combine two efforts. T-Mobile's long-range network spectrum is especially notable: The company thinks it can eventually cover 96% of Americans.

But Verizon nevertheless remains in strong position to maintain its lead as the world begins to transition to faster mobility. The company was the first to launch a commercially available 5G service and has ample free cash flow to keep building out the infrastructure needed to support nationwide coverage. It's far too early to say who will eventually emerge on top, but in the meantime, Verizon is a solid bet for income investors with its stable wireless business and a dividend currently yielding 4.4%.

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