Verizon ends its slump with strong customer numbers, service revenue growth

Carrier ended 2022 with its best customer numbers in seven years

Verizon reported fourth quarter numbers with improved customers numbers and strong growth in service revenue, and company executives said that the company has entered the new year with strong momentum in both wireless and Fixed Wireless Access for home broadband.

However, investors seemed put off by lower guidance and a broader range on earnings per share, and sent the stock down modestly on Tuesday.

Verizon said that it added postpaid phone net additions of 217,000, with retail postpaid net adds of 1.4 million—its “best single quarter performance in seven years,” the company noted.

Verizon said that its success in the quarter was driven by “strong Fixed Wireless Access momentum, tablet and wearables adoption, and sequential improvement in phone net additions.” The company added total broadband net adds of 416,000 (its best performance in more than a decade, it said), of which 379,000 were FWA net adds in the fourth quarter.

CEO Hans Vestberg said that the company’s FWA home broadband offering is mostly being served by its newly C-Band spectrum and that Verizon is using its cell sites to serve mobility, FWA and MEC rather than use separate infrastructure for each function. Asked by an analyst on the company quarterly call how to think about return on investment from Verizon’s C-Band network deployments, Vestberg said that Verizon would not be able to grow its FWA business as much as it has, without that deployment; that it has helped to grow service revenue by fueling customer step-ups on premium plans; and that the company also sees C-band as key to its plans to support private networks and 5G ME—although the latter opportunity has been slower to see enterprise adoption than the operator originally anticipated.

Verizon reported net income of $6.7 billion for the fourth quarter, up 41.4% from the same period last year.

Verizon recorded a loss of 175,000 net prepaid customers in the fourth quarter, which it attributed to a combination of lower gross additions, more aggressive pricing on postpaid plans in the market and its own “deliberate brand rationalization strategy within TracFone … to focus on brands that can generate more long term profitable growth.”

Verizon also said that as a result of fully decommissioning its 3G network, it removed a little more than 900,000 connections from its customer base, including 576,000 consumer and 333,000 business connections; of which 392,000 were wireless postpaid and 237,000 were wireless prepaid connections. The shut-off related figures were excluded from its calculations of wireless retail net additions and wireless churn for the quarter and year.