Verizon Wireless has been losing customers in record numbers. Last Thursday Verizon reported a net decline of 289,000 cell phone subscribers within the past four months. Verizon normally loses some customers every quarter, however, they always managed to regain enough of them to grow their business.
But things have changed, analysts stated that within the past few months, hundreds of thousands of customers switched from Verizon to other cell phone carriers such as Sprint and T-Mobile. Things would have been worse if Verizon didn’t reintroduce their unlimited data plans in February.
Based on Verizon’s latest earnings report, in the first six weeks of the year, Verizon lost almost 400,000 wireless customers. However, Verizon stated that when they offered their unlimited data plans they gained 110,000 new subscribers.
Verizon has been experiencing these problems as a result of stiff competition in the cell phone industry and their unwillingness to bring back the unlimited data plan. Verizon has stated that consumers are willing to pay a premium for a high-quality wireless service in comparison to other carriers such as T-Mobile and Sprint.
Roger Entner who is an industry analyst with Recon Analytics recently stated that aggressive moves by smaller cell phone carriers to build out their networks are paying off. Other companies such as T-Mobile have been improving the quality of their service while charging their customers less money than Verizon.
Within the last year, T-Mobile spent $8 billion to acquire rights to radio spectrum which they will use to expand their mobile internet capacity. This type of technology will entice Verizon customers to make the switch to T-Mobile. Within the past few months, fewer customers have been leaving the smaller carriers to switch to Verizon or AT&T.
The cell phone industry is extremely competitive, this has forced cell phone carriers to offer more competitive deals in an effort to gain more customers. The larger cell phone service providers such as Verizon and AT&T must find new ways to re-invent themselves if they would like to be considered a viable option in the future.
This is great news for the consumer because stiffer competition equals lower prices, please let me know your thoughts about this in the comment section below.