Verizon Wireless Posts 615K Postpaid Net Adds for Q2 2016

Verizon Wireless has just posted their second quarter numbers for 2016, and they have 615,000 postpaid net adds for the quarter. Not too bad, considering they did add customers, but still far below what they typically have added in recent history. With those net adds, Verizon now has 113.2 million retail connections, which the company says is a 3.3% increase year-over-year. Their retail postpaid connections base grew 3.9% year-over-year and prepaid connections are sitting at 5.4 million. When it comes to their churn rate, Verizon was able to keep their churn pretty low at 0.94%. For those that may not be aware of what "churn" is, it's a metric used to determine how many customers are leaving versus those coming in.

Operating income for Verizon Wireless was $8 billion, with segment operating income margin being 36.9%. During the quarter, Verizon Wireless' EBITDA was $10.3 billion, that's a year-over-year increase of 3.8%. Total revenues for the quarter sat at $21.7 billion, that's a decline of 4% year-over-year. Verizon attributes this to more customers choosing unsubsidized plans, like Verizon Edge. On the flip side, service revenues and device payment plan billings increase 2.3% year-over-year, to about $19.1 billion. About 67% or two-thirds of phone activations were done on device payment plans. That's slightly down from the 68% a year ago. Verizon has about 53% of their postpaid phone customer base on unsubsidized plans. As of June 30th, Verizon had 31.8 million device payment plan phone connections. Which is equal to about 37% of their postpaid phone base.

While Verizon added 615,000 connections, that breaks down to 462,000 4G LTE smartphones, and 356,000 tablets for the quarter. Prepaid devices declined by 30,000 for the quarter. When it comes to their LTE network, Verizon estimates that about 93% of the traffic on their network is done on 4G LTE. Additionally, overall LTE traffic has increased by about 44% year-over-year.

A somewhat decent quarter for Verizon. Although they did see a decrease in their total revenues, Verizon expects to see growth before the end of 2017. This is to be expected, with the industry switching over from subsidized smartphones to payment plans, where many customers are paying nothing up-front for their smartphones. Like any big change, this is going to take a few years to switch over.

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