Investment Analysts at Wells Fargo have upgraded their forecast subscriber numbers for Verizon Wireless because of the carrier's promotions, launched in April - and it appears that solid growth in the tablet market is to blame. Originally, Wells Fargo had expected Verizon to add 970,000 customers in the second quarter but three analysts, Jennifer Fritzsche, Eric Luebchow and Caleb Stein, have written a research note upgrading this number go 1.06 million. Of these subscribers, 850,000 are from tablet customers with the balance, almost 160,000, coming from post paid 'phone customers. The analysts said this in the note: "Unlike Q1, we expect Q2 postpaid handset adds to be positive. Our Q2 handset estimate is 159K (vs. Street consensus of 120K). We are also lowering our Q2 postpaid churn to 0.98% (vs. 1.01% prior) to reflect (1) a seasonally lower churn quarter, and (2) VZ's recent success upgrading customers coming off contract."
If these subscriber growth numbers are accurate, it demonstrates Verizon's resilience in the face of intense competition such as T-Mobile US' "Never Settle" trial, which ran from mid May to late June. This was a deliberate scheme to steal customers away from Verizon as under the promotion, Verizon customers had the opportunity to port their number(s) to a new T-Mobile smartphone for up to two weeks as a trial. If the customers were happy with the T-Mobile US service, T-Mobile agreed to pay any of Verizon's early termination fees or outstanding device payments up to $650, providing customers traded in their old handset and purchased a new one from T-Mobile. If customers did not want to switch to T-Mobile, they needed to return their T-Mobile device and any trial costs would be refunded, together with any service costs to return to Verizon including activation and related charges.
Verizon's promotions introduced in late April included dropping the 10 GB monthly data plan to $80 a month, down from $100. The 15 GB plan was reintroduced at the $100 a month point. These prices exclude the monthly access charges for smartphones, tablets or other devices, which on a two year contract weigh in at $40. Devices bought using Verizon's Edge equipment installation plan cost $15 a month on plans with 6 GB or more of data allowance.