It seems as if, Verizon is actually starting to feel the pain of T-Mobile and Sprint, aka the little guys. T-Mobile and more recently Sprint, have been pricing their plans and phones aggressively to catch up with the duopoly of AT&T and Verizon. T-Mobile has been adding customers like crazy in the past year or so. Adding over 8 million customers in 2014. Verizon has released their Q4 numbers, and while they are pretty much the same as they always are, the real news here is their churn rate. Verizon did add 2 million new customers, and connected 1.4 million tablets. But their churn rate hit 1.39%, the highest it’s been in over 2 years.
For those unfamiliar with the churn rate, it’s the percentage of overall customers who leave each quarter. You could also think of it as a turnover rate. Carriers like T-Mobile, Sprint and AT&T who have big prepaid carriers like Cricket and Boost Mobile, typically have higher churn rates. But Verizon hasn’t really focused in on prepaid in quite some time, having all their focus on postpaid. And they always have the lowest churn rate. So Verizon lost over 1.4 million customers in Q4. That’s pretty crazy.
It looks like T-Mobile and Sprint are the ones that pulled customers away from Verizon in Q4, for the most part. T-Mobile announced it brought in 2.1 million customers, and Sprint brought in 1 million customers in that quarter. AT&T hasn’t released any numbers yet, but we should see those soon.
So should Verizon and it’s shareholders start to worry? I wouldn’t. While Verizon is losing customers, they are still growing. Losing about 1.4 million customers, and adding about 2 million, means they are still growing, just not as fast as they used to. Also, Verizon does still have the best coverage. Which is the biggest reason why their prices are higher than their competitors. However, this could be a good thing. It means that Verizon is going to start competing more with AT&T, T-Mobile and Sprint. Which is good for Verizon customers and customers on other carriers. And something this industry hasn’t seen in quite a while.