Analysts Predict Uptick To Verizon's Outlook Going Into 2018

Advertisement
Advertisement

A new report from Scotiabank Equity Research predicts that Verizon's financial circumstances are poised to improve substantially going into 2018. That's primarily thanks to three key shifts in Verizon's business operations, the analysts say, including a decline in the competitiveness of the mobile industry as a whole over the third quarter. For starters, the many of the service provider's competitors have not pursued promotional campaigns for this year's new high-end devices. That has allowed Verizon to hold back, as well, which results in money saved for the company. The trend is expected to continue into next year and that should only serve to further reign in the amount of money lost for each wireless account that buys a new device.

Meanwhile, the company finally brought its own unlimited plan to market earlier this year, which falls more in line with what other carriers are offering. The struggle to offer unlimited data has been a big problem for carriers over the past couple of years, with mobile revenues declining as companies compete for new subscribers. However, the timing of Verizon's move has actually helped the company, the analysts say, in that it has helped Verizon hold onto some of its customers. Further, the analysts are expecting Verizon to add 525,000 postpaid additions for the Q3 – which would be around an 18-percent increase from last year. That would also be a decline of around 15-percent from quarter-to-quarter but Scotiabank analysts' above-mentioned prediction regarding losses per account and less churn in customers should help to offset the decline. Finally, the analysts point to projects Verizon is engaged in outside of the mobile industry for improvements to its bottom line in 2018. More specifically, the analysts suggest that the carrier's foray into the digital media market and connected-car industry will be paramount for improvements to Verizon's financial standings.

In addition to losing subscribers consistently for several quarters, it had previously been predicted that the company would continue to see major declines in revenue. So any analysis indicating that Verizon's efforts are beginning to pay off is likely to be welcome news for the carrier. Since Q3 2017 earnings from across the tech industry are already beginning to be reported, whether or not the predictions turn out to bear out should also begin to become apparent sooner, rather than later.

Advertisement