Verizon faces major setback as nearly 300,000 customers jump ship

Summary

In its latest earnings report, Verizon revealed it lost 289,000 subscribers in quarter one of this year, far worse than expected.
The decline is partly attributed to government spending cuts from the Trump Administration.
Competitive intensity is also to blame, with steeper competition from T-Mobile and AT&T, and other wireless carriers in the US, impacting Verizon’s subscriber base.

Verizon
is well known for being the

largest wireless carrier
in the US, and its competition in recent years, such as T-Mobile and AT&T, has stepped up immensely in an attempt to pull subscribers away from the company and take its crown — a strategy that appears to have finally started working.

Verizon’s latest earnings report paints a grim picture for the company, with the wireless carrier revealing it lost 289,000 subscribers in the first quarter of the year, far worse than the 185,500 analysts predicted the company would lose (via Bloomberg).

This is a stunning reversal compared to the fourth quarter of last year when Verizon gained 568,000 subscribers. And compared to the same period more than a year ago, the decline is more than double.

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Reduced government spending and increased competition to blame

Verizon also recently increased the price of some of its fees and insurance

Verizon attributes part of its significant decline in the first quarter of the year to changes implemented by the Trump Administration. CEO Hans Vestberg stated during the earnings call that the wireless carrier “saw some impact of the new government and their efficiency work.” The efficiency work Vestberg refers to is likely Elon Musk’s Department of Government Efficiency (DOGE), which has been focused on reducing government spending.

Verizon holds various contracts with US federal government agencies, including the Department of Defense (DoD) and the Federal Emergency Management Agency (FEMA). Both departments have recently experienced spending cuts, with the DoD announcing over $5 billion in reductions. Given the ongoing spending cuts, it appears that some of Verizon’s contracts with the federal government may have been impacted.

Verizon’s drop in subscribers is also largely driven by increased competition. In March, prior to the release of these new figures, Verizon’s Chief Revenue Officer, Frank Boulben, noted that the carrier’s subscriber counts were “probably going to be soft” this quarter, attributing it to an “elevated level of competitive intensity” (via Bloomberg).

Competitors like T-Mobile and AT&T are working hard to entice Verizon customers with attractively priced plans that offer comparable benefits and network access. Changes to prices and plans may have also made some Verizon customers jump ship recently, as the carrier has increased charges on

some of its fees
and insurance. Though other carriers, like T-Mobile, have also increased prices.